Consumer Credit Products and the Types of Credit Agreements
The basic taxonomy
Belgian consumer credit law builds on a small set of agreement types, and exam questions reward precision about which type is described.
- Instalment sale / hire-purchase (koop op afbetaling): the consumer becomes owner only after the final payment; the seller remains owner until then.
- Credit sale with reservation of title: ownership passes immediately but title is reserved as security.
- Personal loan (lening op afbetaling): a sum of money is advanced and repaid in instalments, typically with a defined term and fixed or variable rate.
- Opening of credit / revolving credit: a credit line the consumer draws on repeatedly, with a minimum monthly repayment; this is where cost-disclosure traps concentrate.
- Leasing and rental with purchase option: use of an asset against periodic payments, sometimes with an option to buy.
- Overdraft and deferred payment arrangements, including cards with a credit function.
What makes it "consumer" credit
The borrower is a natural person acting for private purposes, and the credit is above the small-amount threshold and below the regulatory ceiling. A loan for business purposes, or one exceeding the ceiling, falls outside the protective regime and may follow different rules.
Cost concepts
The annual percentage rate of charge (APR / JKP) expresses total cost including interest and mandatory ancillary costs over a year. The total cost of credit is the euro amount. Questions frequently test whether a fee (arrangement fee, insurance, valuation) enters the APR: mandatory charges do, genuinely optional ones generally do not.
Traps
Watch for a revolving credit described as a "personal loan with flexible repayment" - the type determines the disclosure and withdrawal rules. Also watch the right of withdrawal: for most consumer credit the consumer has fourteen days to withdraw, and for revolving credit special rules on termination and repayment apply. Do not confuse the withdrawal right with the right to repay early, which is separate and may carry a compensation capped by law.
Rule of thumb
Classify first (money loan versus sale-based, fixed-term versus revolving), then apply the disclosure duties that follow from that classification.