Taking Out a Loan in Austria: Contracts, Interest, Security and Cancellation in 2026

Taking out a loan in Austria creates a long-term financial and legal obligation. The Austrian Consumer Credit Act (Verbraucherkreditgesetz, VKrG) provides several protections for consumer borrowers, while property loans are subject to additional rules. Here is what to know about contracts, interest, security and ways to end or repay a loan.

What must a loan contract contain?

Before you sign, the lender (Kreditgeber) must provide free information using the mandatory EU form, the Europäische Standardinformationen für Verbraucherkredite. The following information must also appear in advertising:

• the total amount of credit;
• the interest rate (Sollzinssatz);
• the annual percentage rate of charge (effektiver Jahreszinssatz);
• the term (Laufzeit);
• the total amount payable, including the amount paid out and the costs.

The contract must also identify the parties and state the type of loan, the number, amount and due dates of instalments, and any required security. For a property loan secured by a mortgage, or a loan intended to finance a property purchase, you must receive a separate EU information sheet: the ESIS information sheet (ESIS-Merkblatt).

The law does not cover every type of borrowing. For example, it does not apply to low-cost loans that must be repaid within three months, such as certain credit-card transactions. The consumer credit rules generally apply to loans of at least 200 euros, including instalment purchases.

How does a bank assess your application?

Before concluding the contract, the bank must check your creditworthiness (Bonitätsprüfung). This includes your income, financial situation and available security. If the bank identifies a risk, it must issue a warning (Warnpflicht).

Private individuals are generally fully legally competent from the age of 18. A minor with limited legal capacity (mündige Minderjährige) who has their own income, such as wages or a training allowance, may take out a loan without parental consent if repayment would not endanger their basic living costs. In that situation, the bank must examine the minor’s income with particular care.

Nominal interest, APR and interest changes

The nominal interest rate (Nominalzinssatz) is the annual price of borrowing money. The annual percentage rate also includes charges, administration costs, origination fees and known insurance costs. This makes the annual percentage rate more useful for comparing offers.

Loan interest rates are often variable. The interest adjustment clause (Zinsgleitklausel) must set out how the rate changes, and adjustments may only be linked to an objective indicator independent of the bank, such as EURIBOR. Adjustments may take place quarterly, every six months or annually. Before a change, the bank must notify you in writing and state the new nominal and annual percentage rates.

With a fixed-rate loan, instalments do not fluctuate. However, the bank will generally charge a higher rate, and your rate will not fall if market interest rates decrease.

An unlimited interest-rate floor was unlawful in the contract as early as 13 June 2017. Anyone who paid too much interest because of this may be able to claim it back.

What security can the bank request?

All agreements concerning security (Kreditsicherheiten) must be recorded in the contract. A bank may request more than one type at the same time.

• Assignment of salary (Gehaltsverpfändung): This appears in almost every personal loan. If you fall behind, the bank may access your wages in a way similar to enforcement, while the minimum amount needed for living costs remains protected. With a “silent” arrangement, the employer is informed only if payment defaults occur.
• Guarantee (Bürgschaft): The guarantor agrees to pay if the borrower does not. Banks usually request joint and several liability (Bürge und Zahler), meaning they may claim the debt from any liable person.
• Mortgage (Hypothek): The property is encumbered by a registered charge in the land register (Grundbuch). A typical term is 15–30 years.
• Life insurance: If the insured person dies, the outstanding loan is settled first and beneficiaries receive only the remainder.

Mortgage loans usually have considerably more favourable interest rates, but they involve certification and registration costs at the start.

Withdrawal and cancellation rights

Consumer loans

You can withdraw from a consumer credit contract within 14 days without giving a reason and without paying a fee (Rücktrittsrecht). The period starts when you receive the complete contract documentation and the withdrawal information. You must repay the amount paid out and the interest accrued for the relevant period within no more than 30 calendar days.

Property loans

There is no general 14-day withdrawal right for a property loan. You can withdraw within two working days if you did not receive the ESIS information sheet at least two working days before signing the contract. This option ends no later than one month after the contract was signed.

Open-ended loans

You can cancel an open-ended loan at any time without cost (Kündigung). A notice period applies only if the contract provides for one, and it may not exceed one month. The bank may cancel the loan only if this was agreed in the contract, with at least two months’ notice and in writing or on another durable medium.

Early repayment and payment defaults

• Variable interest: Early repayment is generally possible at any time without additional cost.
• Fixed interest, up to 10,000 euros per year: No fee.
• Fixed interest above 10,000 euros: The fee may not exceed 1% of the amount repaid early.
• One year or less remains until maturity: The fee may not exceed 0.5%.
• Mortgage loan: A notice period of up to six months or repayment at the end of the fixed-interest period may apply. Without this, compensation may be no more than 1%.

If you cannot pay on time, contact the bank immediately. Acceleration of the entire outstanding balance (Terminsverlust) is lawful only if the payment has been overdue for at least six weeks and the bank has demonstrably issued a warning with an additional period of at least two weeks, without receiving payment.

Frequently asked questions

How high can default interest be?

Default interest may be no more than 5 percentage points per year above the contractual nominal interest rate.

Can I request a repayment schedule?

Yes. For a loan with a fixed term, the bank must provide a repayment schedule (Tilgungsplan) free of charge whenever you request one. It must break down the instalments into principal, interest and costs.

Can I still take out a foreign-currency loan?

New foreign-currency loans for private individuals are prohibited in almost all cases.

Is refinancing worthwhile?

Refinancing (Umschuldung) is worthwhile only if the savings on interest and fees are greater than the costs of the new loan.

Practical steps before signing or cancelling

1. Request the complete Europäische Standardinformationen für Verbraucherkredite and compare the annual percentage rate, not only the nominal interest rate.
2. For a property loan, check that you received the ESIS information sheet at least two working days before signing.
3. Read every clause concerning variable interest, security, early repayment and cancellation.
4. Ask for a free Tilgungsplan for a fixed-term loan and check the split between principal, interest and costs.
5. If you want to withdraw or cancel, make the request in writing and keep proof of delivery.
6. If you expect payment difficulties, contact the bank immediately and keep records of any agreed repayment arrangement.

Important: This article is based on information available online and is not legal or financial advice. Use it at your own risk. If you need professional advice, contact a lawyer, legal adviser or another relevant professional.

Source: oesterreich.gv.at