Bank credit and suretyship in Belgium: granting, termination, early repayment and guarantees

This post is also available in:

Updated on 18 October 2026.

A loan is negotiated, repaid and sometimes terminated. Around it sit guarantees: a surety, a bank guarantee, a letter of comfort. Each step has its own rules, which differ depending on whether the borrower is a consumer, an SME or a large company.

This guide sets out Belgian law on bank credit and personal guarantees, and links each question to our detailed analyses.

Which credit, which rules?

Belgian law does not treat every credit in the same way.

• Consumer credit (personal loan, car loan, credit line, instalment sale): Book VII of the Code of Economic Law, which transposes the 2008 EU directive.
• Mortgage credit to a consumer: also Book VII, which transposes the 2014 mortgage credit directive.
• SME credit: the Law of 21 December 2013 on SME financing imposes information duties, reasoned refusals and a cap on the early repayment indemnity.
• Other business credit: the contract, the bank’s general terms and general contract law.

Terminology matters. A loan (prêt) is formed by the handing over of the funds. A credit facility (ouverture de crédit) makes funds available, which the borrower may or may not draw. The distinction has practical consequences, in particular for the early repayment indemnity (see below).

Is the bank liable for the credit it grants or refuses?

A bank is never obliged to grant credit. It assesses the risk freely, and a court cannot substitute its own assessment. The bank is only liable if it clearly departed from the conduct of a normally prudent and diligent banker in the same circumstances. The court looks at the time of the decision, without taking into account later events the bank did not know of.

The bank must enquire into the borrower’s repayment capacity. It may in principle rely on the information and documents provided, unless they are obviously inaccurate, and it is not required to carry out an audit. The burden of proving a breach lies with the party alleging it.

For consumer credit, the law is stricter: the lender must look for the type and amount of credit best suited to the consumer (Article VII.75) and may only conclude the contract if it can reasonably consider that the consumer will be able to repay (Article VII.77). The Court of Justice held in 2019 (C-58/18) that these Belgian rules are compatible with the directive. Similar duties apply to mortgage credit.

For SMEs, a refusal must be explained in understandable terms. This does not create a right to credit.

Further reading: Granting credit: 10 key principles · Consumer credit and the bank’s assessment · Refusal of credit or extension

When may the bank terminate a credit?

Regulated credit. For consumer credit (Article VII.105) and mortgage credit (Article VII.147/20), an acceleration or termination clause is only valid in the cases set by law. The most common case: the consumer has failed to pay at least two instalments, or an amount equal to 20% of the total amount due, and has not paid within one month after a formal notice sent by registered letter, which must restate these conditions.

Business credit. The bank may end the credit in three types of situations: an event covered by a termination clause in the contract (payment default, deteriorating financial position, loss of confidence), termination of an open-ended credit with the agreed notice, and circumstances specific to contracts concluded in view of the person (bankruptcy, dissolution). Outside regulated cases, the decision need not be reasoned, subject to the prohibition of abuse of rights.

Abuse of rights. The court checks whether the bank acted as a prudent and reasonable creditor would. An abrupt termination may make the bank liable. However, a bank cannot be blamed for terminating a credit that the borrower never performed normally. The Brussels Court of Appeal accepted on 27 January 2026 that a bank may terminate a credit during a criminal investigation, before any conviction, where the decision rests on objective elements and on the contract.

Further reading: Credit termination and criminal investigation (Brussels, 27 January 2026) · Recurring delays and termination: abuse of rights? · Mortgage credit termination and conciliation

What happens after termination?

• Acceleration. The outstanding balance becomes immediately due.
• Interest and penalty clause. Contracts usually provide for default interest and a fixed indemnity. For regulated credit, the law sets limits. For business credit, a court may reduce a manifestly excessive penalty clause.
• Central Credit Register. Payment defaults on credit to individuals are recorded in the National Bank’s Central Individual Credit Register.
• Mandatory conciliation. For mortgage credit to a consumer, the lender must summon the debtor before the attachment judge for a conciliation attempt before any enforcement (Article VII.147/24). The payment plan agreed must then be strictly complied with.
• Payment facilities. In consumer credit, the justice of the peace may grant payment facilities (Article VII.107). An over-indebted debtor may also apply for collective debt settlement.

Early repayment: what indemnity?

A borrower who repays early deprives the bank of the agreed interest. The bank therefore often claims a reinvestment indemnity (or “funding loss”). The amount depends on the applicable regime:

• Consumer credit: capped at 1% of the capital repaid, or 0.5% if the remaining term does not exceed one year.
• Mortgage credit to a consumer: capped at three months’ interest on the capital repaid, if the contract provides for it.
• SME credit (Law of 21 December 2013): capped at six months’ interest for credits up to EUR 2 million.
• Interest-bearing loan: Article 1907bis of the former Civil Code limits the indemnity to six months’ interest.
• Business credit facility outside these regimes: the contract applies.

This difference explains extensive litigation: borrowers have asked courts to requalify their credit facility as a loan in order to benefit from the Article 1907bis cap. The Court of Cassation clarified the criteria between 2020 and 2022. The central criterion is the borrower’s real freedom to draw: a commitment fee or a single drawdown is not enough to rule it out, and the freedom to draw is distinct from the freedom to use the funds. Where that freedom is purely fictitious, the court may find a promise to lend.

Further reading: Funding loss: background and state of play · Funding loss case law across Belgium · The Court of Cassation continues

Suretyship since 1 January 2026

The Law of 5 June 2025, published in the Belgian Official Gazette on 11 July 2025, inserted Title 1 of Book 9 into the Civil Code, dealing with personal guarantees. It has applied since 1 January 2026 and replaces former Articles 2011 to 2043octies.

• Scope: suretyship (accessory personal guarantee), autonomous guarantee, letter of comfort, joint liability as security.
• Freedom of contract: the rules are largely default rules. In case of doubt, a personal guarantee is presumed to be a suretyship.
• Maximum amount: the suretyship must state the maximum amount guaranteed.
• Consumer guarantor: a protective, mandatory regime. A consumer may only give a suretyship; an autonomous guarantee or letter of comfort given by a consumer is requalified as a suretyship. The commitment must be proportionate to the consumer’s income and assets, failing which it may be reduced. The creditor must inform the guarantor before signature, every year on the state of the debt, and promptly if the debtor defaults. This regime does not apply to a person who has substantial influence over the debtor company.

Further reading: Personal guarantees: Book 9 of the Civil Code

Suretyships granted before 2026

The new rules only apply to guarantees granted from 1 January 2026. Earlier suretyships remain governed by the rules in force when they were granted, so both regimes will coexist for years.

For these older suretyships, the question of the gratuitous suretyship therefore remains relevant. An individual guarantor who derived no economic benefit, direct or indirect, from the commitment could benefit from specific protection, including a possible discharge in the debtor’s bankruptcy if the commitment was manifestly disproportionate to the guarantor’s means. Courts assess gratuitousness at the time of the commitment and in concrete terms: a director, a shareholder or the spouse of a manager often derives at least an indirect benefit.

Further reading: Gratuitous suretyship: a question of fact · Twenty years of proceedings over a joint and indivisible suretyship

First-demand bank guarantees

A first-demand guarantee is autonomous: the guarantor bank undertakes to pay on simple demand by the beneficiary, without being able to raise defences based on the underlying contract. This is what distinguishes it from a suretyship. Book 9 of the Civil Code now gives it a statutory basis.

The only limit is a manifestly abusive or fraudulent call. It must be obvious on a summary examination, with no apparent possibility of dispute. A principal who wishes to prevent payment usually applies urgently to the judge in summary proceedings.

Further reading: First-demand bank guarantees: the bank’s obligations · Abusive call, applicable law and jurisdiction

Letters of comfort

With a letter of comfort, a parent company or a manager undertakes to support a company towards its bank. Its scope depends entirely on its wording: a mere statement of intent, an obligation of means or an obligation of result. A phrase such as “ensure that the company has the means to meet its obligations” may be read as an obligation of result, making the signatory liable to compensate the bank for the unpaid balance.

Credit intermediaries

Credit brokers and agents must also check the information they pass on and propose suitable credit. They may be liable towards the client as well as the lender, for example where falsified documents were passed on without checking.

What will change

The new EU Consumer Credit Directive (Directive (EU) 2023/2225) was transposed by a law adopted by the Belgian Parliament on 9 July 2026. It applies in principle to credit applications made from 20 November 2026. It extends consumer credit rules to small loans and certain deferred payment products (“buy now, pay later”) and strengthens the creditworthiness assessment. For these new credits, some rules and article numbers cited in this guide may change.

Book 9 of the Civil Code will be completed by further titles on security interests over assets (pledge, mortgage, privileges).

All our analyses on credit and guarantees

Granting credit and liability

• Refusal of credit or extension: a case study (June 2024)
• Granting credit: 10 key principles of Belgian banking law (June 2024)
• Consumer credit and the bank’s creditworthiness assessment (February 2022)

Termination and default

• Credit termination during a criminal investigation (February 2026)
• Mortgage credit termination and conciliation (September 2022)
• Recurring delays before termination: abuse of rights? (November 2020)

Early repayment and funding loss

• Early repayment and funding loss: background (May 2022)
• Funding loss case law across Belgium (February 2022)
• Funding loss: the Court of Cassation continues (July 2020)
• Reinvestment indemnity: a new Cassation judgment (May 2020)
• Reinvestment indemnity and requalification (October 2018)
• Funding loss: in search of the lost logic (November 2017)
• Belgian law and negative interest rates (December 2020)

Guarantees

• Personal guarantees: Book 9 of the Civil Code (May 2026)
• First-demand guarantees: abusive call and jurisdiction (February 2023)
• Gratuitous suretyship: a question of fact (September 2022)
• First-demand bank guarantees: the bank’s obligations (September 2021)
• Joint and indivisible suretyship: twenty years of proceedings (June 2020)

Mortgage credit

• Reverse mortgage: risk or opportunity? (March 2021)
• Outstanding balance insurance: the client cannot remain passive (June 2020)
• The 2016 mortgage credit reform (November 2016)

This guide is provided for general information and does not constitute legal advice. Each situation depends on the contract, the type of credit and the facts.