Provisional text
JUDGMENT OF THE COURT (Seventh Chamber)
23 April 2026 (*)
( Reference for a preliminary ruling – Credit agreements for consumers – Directive 2008/48/EC – Article 3(j) – Article 10(2)(f) – The concept of ‘borrowing rate’ – The concept of ‘amount of credit drawn down’ – Article 3(g) – The concept of ‘total cost of the credit to the consumer’ – Charging interest on an amount corresponding to the cost of the credit – Insurance premium )
In Case C‑744/24,
REQUEST for a preliminary ruling under Article 267 TFEU from the Sąd Rejonowy we Włodawie (District Court, Włodawa, Poland), made by decision of 20 September 2024, received at the Court on 24 October 2024, in the proceedings
P.W.
v
Bank Polska Kasa Opieki S.A.,
THE COURT (Seventh Chamber),
composed of F. Schalin, President of the Chamber, M. Gavalec and Z. Csehi (Rapporteur), Judges,
Advocate General: L. Medina,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after considering the observations submitted on behalf of:
–        P.W., by A. Bieniek, adwokat,
–        Bank Polska Kasa Opieki S.A., by A. Cudna-Wagner radca prawny, and B. Miąskiewicz, adwokat,
–        the Polish Government, by B. Majczyna, acting as Agent,
–        the European Commission, by P. Kienapfel, P. Ondrůšek and M. Owsiany-Hornung, acting as Agents,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1        This request for a preliminary ruling concerns the interpretation of Article 3(j) and Article 10(2)(f) and (g) of Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC (OJ 2008 L 133, p. 66), as amended by Directive (EU) 2021/2167 of the European Parliament and of the Council of 24 November 2021 (OJ 2021 L 438, p. 1) (‘Directive 2008/48’), read in the light of the principle of effectiveness and of Article 3(1) and (2), Article 4(1) and Article 5 of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).
2        The request has been made in proceedings between P.W., a consumer, and Bank Polska Kasa Opieki S.A., a banking institution (‘the bank’), concerning the payment of a debt arising from a consumer credit agreement.
The legal framework
European Union law
Directive 93/13
3        Article 1(1) of Directive 93/13 provides:
‘The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer.’
4        Article 3 of that directive provides:
‘(1)      A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.
(2)      A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.
…’
5        Under Article 4 of that directive:
‘1.      Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.
2.      Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.’
6        Article 5 of Directive 93/13 reads as follows:
‘In the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language. Where there is doubt about the meaning of a term, the interpretation most favourable to the consumer shall prevail. This rule on interpretation shall not apply in the context of the procedures laid down in Article 7(2).’
Directive 2008/48
7        Recitals 19, 31 and 43 of Directive 2008/48 read as follows:
‘19.      In order to enable consumers to make their decisions in full knowledge of the facts, they should receive adequate information, which the consumer may take away and consider, prior to the conclusion of the credit agreement, on the conditions and cost of the credit and on their obligations. To ensure the fullest possible transparency and comparability of offers, such information should, in particular, include the annual percentage rate [(APR)] applicable to the credit, determined in the same way throughout the Community. As the [APR] of charge can at this stage be indicated only through an example, such example should be representative. …
…
31.      In order to enable the consumer to know his rights and obligations under the credit agreement, it should contain all necessary information in a clear and concise manner.
…
43.      … Despite the uniform mathematical formula for its calculation, the [APR] provided for in [Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (OJ 1987 L 42, p. 48)] is not yet fully comparable throughout the Community. In individual Member States different cost factors are taken into account in the calculation thereof. This Directive should therefore clearly and comprehensively define the total cost of a credit to the consumer.’
8        Article 1 of Directive 2008/48, entitled ‘Subject matter’, reads as follows:
‘The purpose of this Directive is to harmonise certain aspects of the laws, regulations and administrative provisions of the Member States concerning agreements covering credit for consumers.’
9        Article 3 of that directive, entitled ‘Definitions’, provides:
‘For the purposes of this Directive, the following definitions shall apply:
…
(g)      “total cost of the credit to the consumer” means all the costs, including interest, commissions, taxes and any other kind of fees which the consumer is required to pay in connection with the credit agreement and which are known to the creditor, except for notarial costs; costs in respect of ancillary services relating to the credit agreement, in particular insurance premiums, are also included if, in addition, the conclusion of a service contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed;
(h)      “total amount payable by the consumer” means the sum of the total amount of the credit and the total cost of the credit to the consumer;
(i)      “[APR]” means the total cost of the credit to the consumer, expressed as an annual percentage of the total amount of credit, where applicable including the costs referred to in Article 19(2);
(j)      “borrowing rate” means the interest rate expressed as a fixed or variable percentage applied on an annual basis to the amount of credit drawn down;
…
(l)      “total amount of credit” means the ceiling or the total sums made available under a credit agreement;
…’
10      Article 10 of that directive, entitled ‘Information to be included in credit agreements’, provides:
‘1.      Credit agreements shall be drawn up on paper or on another durable medium.
All the contracting parties shall receive a copy of the credit agreement. This Article shall be without prejudice to any national rules regarding the validity of the conclusion of credit agreements which are in conformity with Community law.
2.      The credit agreement shall specify in a clear and concise manner:
…
(d)      the total amount of credit and the conditions governing the drawdown;
…
(f)      the borrowing rate, the conditions governing the application of that rate and, where available, any index or reference rate applicable to the initial borrowing rate, as well as the periods, conditions and procedures for changing the borrowing rate and, if different borrowing rates apply in different circumstances, the abovementioned information in respect of all the applicable rates;
(g)      the [APR] and the total amount payable by the consumer, calculated at the time the credit agreement is concluded; all the assumptions used in order to calculate that rate shall be mentioned;
…’
11      Article 19 of Directive 2008/48, entitled ‘Calculation of the [APR]’, provides in paragraphs 1 and 2:
‘1.      The [APR], equating, on an annual basis, to the present value of all commitments (drawdowns, repayments and charges), future or existing, agreed by the creditor and the consumer, shall be calculated in accordance with the mathematical formula set out in Part I of Annex I.
2.      For the purpose of calculating the [APR], the total cost of the credit to the consumer shall be determined, with the exception of any charges payable by the consumer for non-compliance with any of his commitments laid down in the credit agreement and charges other than the purchase price which, for purchases of goods or services, he is obliged to pay whether the transaction is effected in cash or on credit.
The costs of maintaining an account recording both payment transactions and drawdowns, the costs of using a means of payment for both payment transactions and drawdowns, and other costs relating to payment transactions shall be included in the total cost of credit to the consumer unless the opening of the account is optional and the costs of the account have been clearly and separately shown in the credit agreement or in any other agreement concluded with the consumer.’
12      Article 22 of that directive, entitled ‘Harmonisation and imperative nature of this Directive’, provides:
‘1.      In so far as this Directive contains harmonised provisions, Member States may not maintain or introduce in their national law provisions diverging from those laid down in this Directive. However, Article 16a(3) and (4) shall not preclude Member States from maintaining or introducing more stringent provisions in order to protect consumers.
…
3.      Member States shall further ensure that the provisions they adopt in implementation of this Directive cannot be circumvented as a result of the way in which agreements are formulated, in particular by integrating drawdowns or credit agreements falling within the scope of this Directive into credit agreements the character or purpose of which would make it possible to avoid its application.
…’
13      Under Part I of Annex I to that directive:
‘…
The basic equation, which establishes the [APR], equates, on an annual basis, the total present value of drawdowns on the one hand and the total present value of repayments and payments of charges on the other hand …’
Polish law
The Law establishing the Civil Code
14      Under Article 3851(1) of the ustawa Kodeks cywilny (Law establishing the Civil Code) of 23 April 1964, in the version applicable to the main proceedings (Dz. U. 2022, item 1360):
‘Terms in a contract concluded with a consumer which have not been individually negotiated are not binding on the consumer where they define the consumer’s rights and obligations in a manner contrary to public policy, thereby seriously infringing the consumer’s interests (unfair terms). This provision does not affect terms which define the main obligations of the parties, including the price or remuneration, provided they are formulated in an unambiguous manner.’
The Law on Consumer Credit
15      The ustawa o kredycie konsumenckim (the Law on Consumer Credit), of 12 May 2011 (Dz. U. 2011, No. 126, item 715) transposed Directive 2008/48 into Polish law.
16      Article 5(6), (6a) and (10) of that law, in the version applicable to the main proceedings (‘the Law on Consumer Credit’), reads as follows:
‘(6)      “total cost of the credit” – all costs that the consumer is obliged to pay under the credit agreement, including:
(a)      interest, charges, fees, taxes and margins, where known to the lender, and
(b)      the costs of additional services, in particular insurance, where the incurring of those costs is necessary in order to obtain the credit or to obtain it on the terms offered,
except for notary fees payable by the consumer;
(6a)      “cost of credit excluding interest” – all costs borne by the consumer under the consumer credit agreement, excluding interest;
…
(10)      “borrowing rate” – the interest rate, expressed as a fixed or variable percentage, applied on an annual basis to the amount of credit drawn down.’
17      Article 30 of that law provides:
‘1.      A consumer credit agreement must specify:
…
(6)      the interest rate on the credit, the conditions under which that rate applies, and the periods, conditions and procedures for changing the credit rate, including the index or reference rate if applicable to the initial interest rate; if the consumer credit agreement provides for different interest rates, the above information shall be provided for all interest rates applied during the term of the agreement;
…’
18      Article 45(1) of the Law on Consumer Credit provides:
‘In the event of an infringement by the lender of Article 29(1), Article 30(1)(1) to (8), (10), (11) and (14) to (17), Articles 31 to 33, Article 33a and Articles 36a to 36c, the consumer, after submitting a written statement to the lender, shall repay the credit, excluding interest and other credit costs owed to the lender, within the time limits and in accordance with the procedures laid down in the contract.’
The dispute in the main proceedings and the questions referred for a preliminary ruling
19      On 26 May 2022, P.W. and the bank entered into a consumer credit agreement based on a standard form contract. The terms of the contract were not individually negotiated between P.W. and the bank. The amount of the consumer credit taken out by P.W. was 150 000 zlotys (PLN) (approximately EUR 34 400). Of that amount, PLN 133 214.92 (approximately EUR 30 550) was actually paid to P.W., with the remaining PLN 16 785.08 (approximately EUR 3 850) being used to pay for credit insurance, described as ‘voluntary’. Taking out that voluntary insurance was accompanied by a reduction in the interest rate on the loan.
20      The total amount to be repaid by P.W. amounted to PLN 207 073.53 (approximately EUR 47 500) and, in accordance with Article 6(1) of the credit agreement, the total cost of the credit was PLN 73 858.61 (approximately EUR 16 950). That cost included interest amounting to PLN 57 073.53 (approximately EUR 13 100) as well as the insurance premium, referred to in the previous paragraph, amounting to PLN 16 785.08 (approximately EUR 3 850). The interest rate was 8.49% per annum (comprising a base rate of 4.36% and a margin of 4.13%). That interest rate was applied to the amount actually paid to P.W. under the contract, plus the insurance premium. The APR stated in the credit agreement was 12.57%. The term of the agreement was set at 96 months.
21      By letter dated 18 August 2023, pursuant to Article 45(1) of the Law on Consumer Credit, P.W. submitted a declaration to the bank in order to make use of the ‘free-credit’ sanction. In his view, the bank had failed to fulfil its obligations, in particular due to the imprecise determination of the interest base, the indication of an incorrect APR and the lender’s ability unilaterally to alter fees and charges. He therefore requested a refund of the sum already paid in respect of credit costs, amounting to PLN 14 428.83 (approximately EUR 3 310), a request to which the bank did not respond.
22      By application of 25 October 2023, P.W. brought proceedings before the Sąd Rejonowy we Włodawie (District Court, Włodawa, Poland), which is the referring court, seeking, first, a declaration that the loan would be repaid without interest and other related charges, within the time limits and in accordance with the terms laid down in the contract, and, secondly, an order requiring the bank to pay him the sum of PLN 30 051.76 (approximately EUR 6 900), namely the amount of contractual interest already repaid plus the insurance premium, together with statutory default interest. In support of his claim, P.W. argued, inter alia, that the interest rate was applied to an amount corresponding to the cost of credit excluding interest.
23      The bank considers that the APR was calculated correctly. In his credit application, P.W. had requested that the bank include the cost of insurance in the loan amount, which resulted in an increase in the loan amount. The bank also points out that the information stating that the interest rate would be applied to that
amount as determined was included in the credit agreement. It adds that P.W. paid no commission and that the costs of the credit consist solely of the contractual interest and the insurance premium, those costs being described in detail in the ‘Consumer Credit Information Form’, which forms an integral part of the credit agreement.
24      The referring court has expressed doubts as to whether the bank’s practice of charging interest on an amount comprising, in addition to the principal of the loan, non-interest credit costs – that is to say, on a sum not paid in its entirety to the borrower – is compatible with Directive 2008/48. It states, in that regard, that ‘non-interest credit costs’, within the meaning of Article 5(6a) of the Law on Consumer Credit, include, in particular, interest, charges, fees,
taxes and margins where the lender is aware of them, as well as the costs of ancillary services, in particular insurance, where those costs are essential in order to obtain the credit or to obtain it on the terms set out in the offer.
25      It was in those circumstances that the Sąd Rejonowy we Włodawie (District Court, Włodawa) decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)      Must Article 10(2)(f) of [Directive 2008/48], read in conjunction with Article [3](j) thereof, in view of the principle of the effectiveness of EU law and the purpose of that directive, and in the light of Article 3(1) and (2) of [Directive 93/13], read in conjunction with Article 4(1) thereof, be interpreted as precluding the practice of including in consumer credit agreements, the content of which is not the result of individual arrangements between the supplier (creditor) and consumer (borrower), terms that provide for interest not only on the amount disbursed to the consumer, but also on the non-interest credit costs (namely commissions or other fees that are not components of the credit amount disbursed to the consumer, that is to say, are not included in the total amount of credit, and that make up the total amount payable by the consumer in performance of his or her obligation under the consumer credit agreement)?
(2)      Must Article 10(2)(f) and (g) of [Directive 2008/48], in view of the principle of the effectiveness of EU law and the purpose of that directive, and in the light of Article 5 of [Directive 93/13] be interpreted as precluding the practice of including in consumer credit agreements, the content of which is not the result of individual arrangements between the supplier (creditor) and consumer (borrower), terms disclosing only the borrowing rate and total value of capitalised interest expressed as an amount that the consumer is required to pay in the performance of his or her obligation arising under that agreement, without unequivocally and clearly informing the consumer that the basis for calculating the capitalised interest (expressed as an amount) is an amount other than the credit amount actually disbursed to the consumer, and in particular that it is the sum of the credit amount disbursed to the consumer and non-interest credit costs (namely commissions or other fees that are not components of the credit amount disbursed to the consumer, and that make up the total amount payable by the consumer in performance of his or her obligation under the consumer credit agreement)?’
26      By letter of 20 November 2025, the bank stated that it had acceded to the applicant’s claim in the main proceedings, as referred to in paragraph 22 of the present judgment. In response to a question put by the Court, the referring court, by letter dated 18 December 2025, stated that the proceedings in the main action are still pending.
Consideration of the questions referred
Admissibility
27      The bank contests the admissibility of the questions referred for a preliminary ruling.
28      First of all, according to the bank, the questions referred by the referring court are hypothetical in nature, in that they are based on the erroneous premiss that the contractual terms to which those questions relate were not negotiated. Furthermore, the second question is irrelevant, since the information provided to P.W. regarding the fact that the costs relating to voluntary insurance would accrue interest is set out clearly and comprehensibly in both the credit agreement and the information form.
29      Next, the hypothetical nature of the questions referred for a preliminary ruling stems from the fact that the main proceedings do not concern a commission or other charges levied by the bank, but relate to a voluntary insurance premium which, far from constituting a credit cost borne by the borrower for the benefit of the bank, is paid directly into the insurer’s account. In accordance with the definition of ‘total cost of the credit to the consumer’ set out in Article 3(g) of Directive 2008/48, such a premium would correspond to the cost of ancillary services related to the credit agreement and, according to that definition, would fall within a separate category of costs.
30      Finally, the bank submits that the referring court has not provided the Court with the necessary factual or legal information to enable it to give a useful answer to the questions referred, with the result that the request does not meet the requirements laid down in Article 94 of the Court’s Rules of Procedure. In particular, the referring court merely set out the parties’ arguments without verifying them and applied the concept of ‘non-interest credit costs’ inconsistently, by applying the criterion that those costs consist of all amounts included in the credit without being paid directly to the consumer. That court thus fails to take account of the fact that the funds used for the repayment of loans, namely debt consolidation, are not paid to the consumer for him or her to dispose of as he or she sees fit, whereas there is no doubt that they are capable of generating interest.
31      In that regard, it should be noted, first, that, according to settled case-law, questions relating to the interpretation of EU law raised by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 19 December 2024, Tudmur, C‑185/24 and C‑189/24, EU:C:2024:1036, paragraph 26 and the case-law cited).
32      In the present case, it is apparent from the request for a preliminary ruling that the referring court is hearing an action brought by P.W. against the bank seeking, inter alia, a declaration that the loan should be repaid without interest and other related charges, on the ground that contractual interest was charged on an amount corresponding to the cost of credit excluding interest. That court states that it has doubts as to whether the bank’s practice of charging interest on an amount comprising the principal of the loan and the cost of credit excluding interest complies with Directive 2008/48, given that the sum corresponding to those costs was not paid to the borrower.
33      It is against that background that the referring court, by its questions, seeks the Court’s guidance on the interpretation of several provisions of Directive 2008/48, read in the light of the principle of effectiveness and certain provisions of Directive 93/13.
34      Those questions therefore do indeed concern the interpretation of provisions of EU law relevant to the resolution of the main proceedings. Since it is for the referring court alone, under its own responsibility, to establish the legal and factual context of the main proceedings, it is not for the Court to review the premisses on which those questions are based.
35      Secondly, in order to enable the Court to provide an interpretation of EU law that is of practical use to the national court, Article 94 of the Rules of Procedure provides that the request for a preliminary ruling must contain, in particular, a summary of the subject matter of the main proceedings, together with the relevant facts as established by the referring court, or, at the very least, a statement of the facts on which the questions are based. Similarly, that request must include a statement of the reasons which led the referring court to raise questions regarding the interpretation or validity of certain provisions of EU law, as well as the link it establishes between those provisions and the national legislation applicable to the main proceedings.
36      It is apparent from the request for a preliminary ruling that, although the referring court has set out its own findings very briefly, in contrast to the differing views of the parties to the main proceedings, the Court nevertheless has, in the light of the information set out in paragraphs 32 and 33 of the present judgment, the necessary information to provide a useful answer to the questions referred.
37      It follows that the questions referred for a preliminary ruling are admissible.
The substance
38      As a preliminary point, in so far as the referring court describes the insurance premium at issue in the main proceedings as a ‘cost of credit excluding interest’, it should first be noted that that concept is not provided for in Directive 2008/48, but by Polish law and, more specifically, in Article 5(6a) of the Law on Consumer Credit (see, to that effect, judgment of 26 March 2020, Mikrokasa and Revenue Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty, C‑779/18, EU:C:2020:236, paragraphs 40 and 42).
39      The Court referred to that concept in its judgment of 26 March 2020, Mikrokasa and Revenue Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty (C‑779/18, EU:C:2020:236), stating, in paragraph 40 of that judgment, that it constitutes a subcategory of the ‘total cost of the credit’ within the meaning of Article 3(g) of Directive 2008/48, which encompasses all costs, including interest.
40      Next, it should be noted that the questions referred for a preliminary ruling concern the total cost of the loan granted to P.W., which includes, in addition to interest, a sum of PLN 16 785.08 intended to cover the cost of credit insurance, described as voluntary. The referring court has doubts as to whether the bank’s practice of charging interest on the amount paid to P.W. in performance of the contract, plus the cost
of credit excluding interest, complies with Directive 2008/48, specifying that the latter include, in particular, the costs of ancillary services to the contract, notably insurance, where such costs are essential to obtain the credit or to obtain it on the terms set out in the offer.
41      In that regard, it is important to note that the ‘voluntary’ nature of the credit insurance at issue in the main proceedings means that it was not a prerequisite for obtaining the loan as such. However, in so far as taking out that credit insurance was accompanied by a reduction in the interest rate on the credit, that credit insurance was required in order to obtain the credit on the terms set out in the offer thereof. In those circumstances, the insurance premium, which, in accordance with Article 6(1) of the credit agreement, forms part of the total cost of the credit, thus falls within the concept of ‘total cost of the credit to the consumer’ within the meaning of Article 3(g) of Directive 2008/48.
42      Finally, in so far as the referring court treats ‘non-interest credit costs’ as a sum not paid to the borrower, it should be emphasised that the classification of a ‘total cost of the credit to the consumer’, as provided for in Article 3(g), as a specific amount to be borne by the borrower in accordance with the credit agreement, does not depend on whether or not that amount has been paid into the borrower’s bank account.
43      The fact that the borrowed sums are first paid into the borrower’s bank account before being used to pay for goods or services, or to settle certain costs, or that the lender makes the payment directly to the borrower’s creditors, is of a contingent nature and cannot, as such, affect their classification as credit costs.
The first question
44      According to settled case-law, in the context of cooperation between national courts and the Court established by Article 267 TFEU, it is for the Court to provide the national court with a useful answer enabling it to resolve the dispute before it. With that in mind, it is for the Court, where necessary, to reformulate the questions referred to it. It is for the Court to extract from all the information provided by the national court, in particular from the grounds of the order for reference, the points of EU law which require interpretation, having regard to the subject matter of the dispute (see judgments of 29 November 1978, Redmond, 83/78, EU:C:1978:214, paragraph 26; of 28 November 2000, Roquette Frères, C‑88/99, EU:C:2000:652, paragraph 18; and of 2 December 2025, Russmedia Digital and Inform Media Press, C‑492/23, EU:C:2025:935, paragraph 44 and the case-law cited).
45      In the present case, the referring court is hearing a case in which it must rule on the compliance with Directive 2008/48 of a practice of the bank consisting in charging interest on an amount comprising, in addition to the principal of the loan, non-interest credit costs, namely on a sum which has not been paid in full to the borrower.
46      It must therefore be held that, by its first question, the referring court, asks, in essence, whether Article 3(g) and (j) of Directive 2008/48, read in conjunction with Article 10(2) of that directive, must be interpreted as precluding the inclusion, in consumer credit agreements, of terms providing for the application of the interest rate not only to the total amount of the credit but also to sums allocated to the payment of costs associated with that credit and which, as a result, form part of the total cost of the credit to the consumer.
47      It should be noted that, according to Article 1 thereof, the purpose of Directive 2008/48 is to harmonise certain aspects of the Member States’ rules on consumer credit agreements.
48      Furthermore, it follows from Article 22(1) of that directive that, in so far as it contains harmonised provisions, Member States may not maintain or introduce national provisions other than those laid down in that directive.
49      As is apparent from the definitions set out in Article 3 of Directive 2008/48, the concept of ‘total cost of the credit to the consumer’ is linked to the definitions of ‘total amount of credit’ and ‘total amount payable by the consumer’ for the purpose of calculating the APR (judgment of 16 July 2020, Soho Group, C‑686/19, EU:C:2020:582, paragraph 38).
50      Since Article 3 of that directive makes no reference to national law in relation to those concepts, each of them must be regarded as constituting an autonomous concept of EU law, to be interpreted in a uniform manner throughout the territory of the European Union (judgment of 16 July 2020, Soho Group, C‑686/19, EU:C:2020:582, paragraph 39 and the case-law cited).
51      First of all, as regards the concept of ‘total amount of credit’ within the meaning of Directive 2008/48, that is defined in Article 3(l) as the ceiling or the total sums made available under a credit agreement.
52      Next, as is apparent from the Court’s case-law, in order to ensure comprehensive consumer protection, the EU legislature has adopted, in Article 3(g) of that directive, a broad definition of the concept of ‘total cost of the credit to the consumer’ as covering all the costs, including interest, taxes and all kind of fees which the consumer is required to pay in connection with the credit agreement and which are known to the lender, with the exception of notary fees (judgment of 26 March 2020, Mikrokasa and Revenue Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty, C‑779/18, EU:C:2020:236, paragraph 39 and the case-law cited). Furthermore, pursuant to Article 3(i) of that directive, the APR corresponds to the ‘total cost of the credit to the consumer’, expressed as an annual percentage of the total amount of credit, taking into account, where applicable, the costs referred to in Article 19(2) of that directive.
53      Finally, it should be noted that, since the concept of ‘total amount payable by the consumer’ is defined in Article 3(h) of Directive 2008/48 as meaning ‘the sum of the total amount of credit and the total cost of the credit to the consumer’, it follows that the concepts of ‘total amount of credit’ and ‘total cost of the credit to the consumer’ are mutually exclusive and that, consequently, the ‘total amount of credit’ cannot include any of the sums forming part of the total cost of the credit to the consumer (judgments of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 85, and of 16 July 2020, Soho Group, C‑686/19, EU:C:2020:582, paragraph 42).
54      Thus, Directive 2008/48 contains a complete definition
of the breakdown of amounts under consumer credit agreements (judgment of 16 July 2020, Soho Group, C‑686/19, EU:C:2020:582, paragraph 43).
55      With regard to the ‘borrowing rate’, which is defined in Article 3(j) of Directive 2008/48 as the ‘interest rate … applied … to the amount of credit drawn down’, it should be noted that the total amount of credit and the amount of the credit drawdown designate the sums made available to the consumer, which excludes those used by the lender to pay the costs connected with the credit concerned and which are not actually paid to that consumer (judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 91).
56      In paragraphs 87 and 88 of the judgment of 21 April 2016, Radlinger and Radlingerová (C‑377/14, EU:C:2016:283), after emphasising that the calculation of the APR depends on the total amount of credit and that, under Directive 2008/48, the basic equation defining the APR expresses, on an annual basis, the equality between, on the one hand, the sum of the present values of the credit drawdowns and, on the other hand, the sum of the present values of the repayment amounts and fee payments, the Court consequently held that the amount of the credit drawdown, within the meaning of Part I of Annex I to that directive, corresponds to the total amount of credit, within the meaning of Article 3(l) thereof.
57      Consequently, none of the sums intended to cover the agreed commitments under the relevant credit concerned – such as administrative costs, interest, commissions and any other type of charge which the consumer is required to pay – may be included either in the total amount of credit, within the meaning of Article 3(l) and Article 10(2) of Directive 2008/48, or in the amount of the credit drawdown within the meaning of Article 3(j) of Directive 2008/48 (see, to that effect, judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 86).
58      That also applies to insurance costs, which the referring court has classified as non-interest credit costs, constituting, as is apparent from paragraphs 39 and 41 of the present judgment, a subcategory of the ‘total cost of the credit to the consumer’ within the meaning of Article 3(g) of Directive 2008/48.
59      It should be noted that that approach, as set out in the judgments of 21 April 2016, Radlinger and Radlingerová (C‑377/14, EU:C:2016:283); of 26 March 2020, Mikrokasa and Revenue Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty (C‑779/18, EU:C:2020:236); and of 16 July 2020, Soho Group (C‑686/19, EU:C:2020:582), does not have the effect of limiting the types of costs or charges that may be imposed by the lender on the consumer under a credit agreement.
60      The lender may choose not to apply the contractual interest rate to amounts corresponding to the cost of credit, whilst avoiding a gradual depreciation of the value of money over time, by applying a proportionally higher borrowing rate that reflects the cost of not receiving interest on amounts corresponding to the cost of credit. In that way, the lender can make credit accessible even to consumers who have no initial capital to finance the costs incurred by entering into the credit agreement.
61      Such a solution is, moreover, consistent with the objectives of Directive 2008/48.
62      It should be noted that that
directive was adopted with the dual aim of ensuring a high and equivalent level of protection for the interests of all consumers in the European Union and of facilitating the emergence of an efficient internal market for consumer credit. It is clear from recital 19 of that directive that it seeks, inter alia, to ensure that consumers receive adequate information, prior to the conclusion of the credit agreement, in particular on the APR throughout the European Union, to enable them to compare the rates applied (judgment of 16 July 2020, Soho Group, C‑686/19, EU:C:2020:582, paragraph 49 and the case-law cited).
63      As recitals 31 and 43 of Directive 2008/48 essentially state, it is of vital importance that consumers are informed of the total cost of credit in the form of a rate calculated using a single mathematical formula. First, that information contributes to market transparency in that it enables the consumer to compare credit offers. Secondly, it enables the consumer to assess the scope of his or her commitment (judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 90 and the case-law cited).
64      Such market transparency would be undermined if it were possible to distinguish between different interest rates, and, in particular, between the borrowing rate applicable to the amount of credit drawn down and other interest rates applied in the Member States to credited sums that do not fall within that definition of the amount of credit drawn down.
65      In view of the foregoing considerations, the answer to the first question is that Article 3(g) and (j) of Directive 2008/48, read in conjunction with Article 10(2) of that directive, must be interpreted as precluding the inclusion, in consumer credit agreements, of terms providing for the application of the interest rate not only to the total amount of the credit but also to sums allocated to the payment of costs associated with that credit and which, as a result, form part of the total cost of the credit to the consumer.
The second question
66      Since insurance costs, as a component of the ‘total cost of the credit to the consumer’ within the meaning of Article 3(g) of Directive 2008/48, cannot be included in the amount of the credit drawdown within the meaning of Article 3(j) of that directive, there is no need to answer the second question.
Costs
67      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (Seventh Chamber) hereby rules:
Article 3(g) and (j) of Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC, as amended by Directive (EU) 2021/2167 of the European Parliament and of the Council of 24 November 2021, read in conjunction with Article 10(2) of that directive,
must be interpreted as precluding the inclusion, in consumer credit agreements, of terms providing for the application of the interest rate not only to the total amount of the credit but also to sums allocated to the payment of costs associated with that credit and which, as a result, form part of the total cost of the credit to the consumer.
[Signatures]
*      Language of the case: Polish.