Consumer Credit and Loans in Denmark
Reviewed by the Commoner Law Editorial Team. Sourced from Danish Acts of Parliament (love), executive orders (bekendtgørelser), and official government guidance. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
Danish law imposes strict requirements on consumer lending:
- Creditworthiness assessment: Lenders must assess your ability to repay before granting credit — irresponsible lending is sanctionable.
- APR disclosure (ÅOP): All consumer credit must clearly state the annual percentage rate of charge (ÅOP) including all fees and charges.
- APR cap: Since 2020, consumer loans have a maximum APR of 35 % — loans above this rate are unlawful.
- Cost cap: Total costs (interest + fees) over the life of the loan cannot exceed 100 % of the principal — i.e., you can never owe more than double what you borrowed.
- Right of withdrawal: You have 14 days to withdraw from a consumer credit agreement without penalty (you must repay the principal plus any accrued interest).
- Early repayment: You have the right to repay a loan early — the lender may charge a limited compensation fee.
When does it apply?
- You are taking out a consumer loan, credit card, or buy-now-pay-later agreement.
- You have a dispute with a lender about terms, charges, or lending practices.
What to Do If a Lender Is Charging You More Than the Legal Interest Cap in Denmark
- Compare ÅOP rates before borrowing — the effective interest rate includes all fees.
- If you suspect the loan exceeds the 35 % APR cap or the 100 % cost cap, report it to Finanstilsynet (Financial Supervisory Authority).
- If you want to cancel, exercise your 14-day withdrawal right in writing.
- If you cannot repay, contact the lender early to discuss restructuring — or seek free debt counselling.
What should you NOT do?
- Don't sign credit agreements without reading the ÅOP — the "monthly fee" may look small but the annual rate can be high.
- Don't borrow from unlicensed lenders — check that the lender is registered with Finanstilsynet.
- Don't ignore payment demands — unpaid consumer debt is sent to Gældsstyrelsen and can lead to wage garnishment.
Common Questions
What is the maximum legal interest rate on consumer loans in Denmark?
Since 2020, consumer loans in Denmark have a maximum APR (ÅOP) of 35 percent — loans above this rate are unlawful. The total cost of the loan, including interest and fees, cannot exceed 100 percent of the principal, so you can never owe more than double what you borrowed under Kreditaftaleloven.
Can I cancel a consumer loan agreement in Denmark after signing?
Yes. You have a 14-day right of withdrawal on a consumer credit agreement without penalty — you only repay the principal plus any accrued interest. Exercise it in writing. You also have the right to repay a loan early, though the lender may charge a limited compensation fee.
What do I do if I think my Danish consumer loan breaks the interest cap?
Compare the ÅOP rates — the effective rate includes all fees. If you suspect the loan exceeds the 35 percent APR cap or the 100 percent cost cap, report it to Finanstilsynet (the Financial Supervisory Authority). Check the lender is registered with Finanstilsynet before borrowing. If you cannot repay, contact the lender or seek free debt counselling.
When does it apply — consumer credit and loans?
You are taking out a consumer loan, credit card, or buy-now-pay-later agreement.You have a dispute with a lender about terms, charges, or lending practices.
What should I do if I think my consumer loan has an APR above the legal 35% cap in Denmark?
Compare ÅOP rates before borrowing — the effective interest rate includes all fees.If you suspect the loan exceeds the 35 % APR cap or the 100 % cost cap, report it to Finanstilsynet (Financial Supervisory Authority).If you want to cancel, exercise your 14-day withdrawal right in writing.If you cannot repay, contact the lender early to discuss restructuring — or seek free debt counselling.
What should you NOT do — consumer credit and loans?
Don't sign credit agreements without reading the ÅOP — the "monthly fee" may look small but the annual rate can be high.Don't borrow from unlicensed lenders — check that the lender is registered with Finanstilsynet.Don't ignore payment demands — unpaid consumer debt is sent to Gældsstyrelsen and can lead to wage garnishment.