A loan is a contract by which a lender makes a sum available to a borrower, who commits to repay it according to a predefined schedule, plus interest. The total cost depends on the borrowed capital, the interest rate, and the repayment duration. Behind this simple mechanism, the types of loans available respond to very different logics depending on the nature of the financed project.
Directive CCD II: What changes for consumer loans in 2026
Most guides on types of loans overlook a major regulatory shift. The Directive (EU) 2023/2225, known as CCD II, replaces the 2008 directive and comes into effect on November 20, 2026. It significantly broadens the scope of consumer credit by including products that were previously outside strict regulation.
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Payment offers in installments (BNPL), micro-loans under 200 euros, interest-free loans offered on e-commerce sites, and bank overdrafts, including so-called “tolerated” overdrafts, will now fall under the protective regime of consumer credit. Each borrower will benefit from a systematic assessment of their creditworthiness, standardized information on the APR, and a 14-day right of withdrawal.
This directive reshapes the contours of what constitutes a “loan.” A purchase split into three payments on an online store will soon be subject to the same obligations as a traditional personal loan.
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This framework will apply to nearly all loans to individuals up to 100,000 euros. To delve deeper into the topic, the loans on Finance Libre provide a comprehensive overview of financing mechanisms.
Mortgage and consumer loan: two distinct financing logics
The first structural distinction opposes mortgage loans to consumer loans. This distinction is not only based on the amount borrowed but also on the guarantee, duration, and legal framework.
A mortgage loan finances the purchase of a home or large-scale renovations. It spans a long duration and is backed by a real guarantee (mortgage or surety). The interest rate is generally lower than that of a consumer loan because the lender has an asset as collateral. The borrower must take out borrower insurance, the cost of which significantly impacts the final APR.
Consumer loans, on the other hand, cover various needs: purchasing a vehicle, home equipment, personal projects. Their repayment duration is shorter, and their rates are higher. They do not require real estate collateral.
Amortizing loan, interest-only loan, and bridge loan
Within mortgage loans, the amortizing loan remains the most common in France. Each monthly payment repays a portion of the principal and a portion of the interest. The interest-only loan works differently: the monthly payments cover only the interest, and the principal is repaid in a lump sum at maturity. This arrangement is particularly attractive to rental investors who deduct the interest from their rental income.
The bridge loan, for its part, allows financing the purchase of a new property without waiting for the sale of the previous one. It is a temporary loan, limited in time, and its cost can rise if the sale is delayed.
Targeted loan, personal loan, and revolving credit: choose according to use
Consumer credit comes in three main forms, each suited to a specific use case.
- The targeted loan is linked to the purchase of a specific good or service (automobile, home appliances, renovations). If the sale is canceled, the loan is also canceled. This interdependence protects the borrower but limits the flexibility of fund usage.
- The personal loan provides a sum freely available to the borrower, without proof of use. The rate is fixed, and the monthly payments are constant. It is the simplest format for financing a project with an unclear scope or that combines several expenses.
- The revolving credit provides access to a replenishable pool of money as repayments are made. Its flexibility comes at a price: the revolving credit rate is the highest in the consumer market. It is suitable for one-off and low-amount expenses, provided that repayments are made quickly.
APR and total cost: concrete criteria for comparing loan offers
Comparing two loans based solely on the nominal rate ignores part of the real cost. The APR (annual percentage rate) includes interest, application fees, the cost of mandatory or optional borrower insurance, and any commissions. It is the only standardized indicator that allows for a fair comparison between two offers.
The repayment duration plays a role that is often underestimated. Lengthening the duration reduces the monthly payment but can significantly increase the total interest cost. For a mortgage, the difference in total cost between a duration of fifteen years and a duration of twenty-five years can represent several tens of thousands of euros, with the same capital and rate.
Three reflexes before signing
- Check that the proposed APR remains below the current usury rate, published quarterly by the Bank of France.
- Simulate the total cost of the loan (principal + interest + insurance + fees) and not just the monthly payment. A “comfortable” loan each month can be very expensive in total.
- Use the 14-day withdrawal period to compare other offers after signing, without penalty.
The choice of a loan relies less on the product category than on the alignment between the borrowed amount, actual repayment capacity, and total cost once all fees are included. With the entry into force of the CCD II directive at the end of 2026, even the lightest forms of financing will be subject to this level of requirement, which should make comparisons clearer for borrowers.