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Credit agreements in the form of overrunning

Last update 11.10.2019

Alongside traditional consumer credit agreements there are more specific agreements, in particular, the granting of credit in the form of overrunning.

This is a tacitly agreed overdraft by virtue of which a lender authorises the consumer to access funds in excess of the balance of their current account or an agreed overdraft facility.

This concerns professional lenders as well as consumers who tacitly accept a consumer credit agreement in the form of overrunning (e.g. credit granted when a current bank account is opened).

Conclusion of the contract

Overrunning does not necessarily have to be agreed in writing.

Duration of the overrunning

Overrunning for more than 1 month

If the overrunning goes on for more than one month, the lender informs the consumer, without delay, on paper or on another durable medium (e.g. CD, etc.):

of the overrunning;
of the amount involved;
of the borrowing rate;
of any penalties and fees or interest applicable.

Overrunning for more than 3 months

If the overrunning continues for more than 3 months, the lender shall immediately offer the consumer another type of credit agreement to prevent the consumer from using the overrunning as a long-term form of credit due to higher interest rates and less favourable terms for the consumer.

Directorate for Consumer Protection

Directorate for Consumer Protection

Address:

271, route d’Arlon L-1150 Luxembourg Luxembourg
B.P. 119 L-2011 Luxembourg

Phone:

(+352) 247-73718

Email address:

info@mpc.etat.lu

Website:

https://mpc.gouvernement.lu/en.html
Directorate for Consumer Protection

Address:

271, route d’Arlon L-1150 Luxembourg Luxembourg
B.P 119 L-2011 Luxembourg

Email address:

passagers@mpc.etat.lu

Website:

https://mpc.gouvernement.lu/en.html

Procedures

Consumer credit / loan agreements Credit agreements in the form of overdraft facilities Entering into a credit agreement when a consumer is already in default on the initial credit agreement

Links

Further information

Financial products and services

on Your Europe

Legal references

Code de la consommation

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