# Consumer Credit

*Directive (90/88/EEC)*

*THE COUNCIL OF THE EUROPEAN COMMUNITIES,*

*Having regard to the Treaty establishing the European Economic Community, and in particular Article 100a thereof,*

*Having regard to the proposal from the Commission(1),*

*In cooperation with the European Parliament(2),*

*Having regard to the opinion of the Economic and Social Committee(3),*

*Whereas Article 5 of Council Directive 87/102/EEC(4) provides for the introduction of a Community method or methods of calculating the annual percentage rate of lcharge for consumer credit;*

*Whereas it is desirable, in order to promote the establishment and functioning the internal market and to ensure that consumers benefit from a high level of protection, that one method of calculating the said annual percentage rate of charge should be used throughout the Community;*

*Whereas it is desirable, with a view to introducing such a method and in accordance with the definition of the total cost of credit to the consumer, to draw up a single mathematical formula for calculating the annual percentage rate of charge and for determining credit cost items to be used in the calculation by indicating those costs which must not be taken into account;*

*Whereas, during a trasitional period, Member States which prior to the date of notification of this Directive, apply laws which permit the use of another mathematical formula for calculating the annual percentage rate of charge may continue to apply such laws;*

*Whereas, before expiry of the transitional period and in the light of experience, the Council will, on the basis of a proposal from the Commission, take a decision which will make it possible to apply a single Community mathematical formula;*

*Whereas it is desirable, whenever necessary, to adopt certain hypotheses for calculating the annual percentage rate of charge;*

*Whereas by virtue of the special nature of loans guaranteed by a mortgage secured on immoveable property it is desirable that such credit should continue to be partially excluded from this Directive;*

*Whereas the information which must be communicated to the consumer in the written contract should be amplified,*

*HAS ADOPTED THIS DIRECTIVE:*

*Article 1*

*Directive 87/102/EEC is hereby amended as follows:*

*1. In Article 1 (2), points ( d) and ( e) shall be replaced by the following:*

*‘( d) “ total cost of the credit to the consumer” means all the costs, including interest and other charges, which the consumer has to pay for the credit.’;*

*‘( e) “ annual percentage rate of charge” means the total cost of the credit to the consumer, expressed as an annual percentage of the amount of the credit granted and calculated in accordance with Article 1a’.*

*2. The following Article shall be inserted:*

*‘Article 1a*

*1. ( a) The annual percentage rate of charge, which shall be that equivalent, on an annual basis, to the present value of all commitments (loans, repayments and charges), future or existing, agreed by the creditor and the borrower, shall be calculated in accordance with the mathematical formula set out in Annex II.*

*( b) Four examples of the method of calculation are given in Annex III, by way of illustration.*

*2. For the purpose of calculating the annual percentage rate of charge, the “ total cost of the credit to the consumer” as defined in Article 1 (2) (d) shall be determined, with the exception of the following charges:*

*(i) charges payable by the borrower for non-compliance with any of his commitments laid down in the credit agreement;*

*(ii) charges other than the purchase price which, in purchases of goods or services, the consumer is obliged to pay whether the transactions is paid in cash or by credit;*

*(iii) charges for the transfer of funds and charges for keeping an account intended to receive payments towards the reimbursement of the credit the payment of interest and other charges except where the consumer doesn ot have reasonable freedom of choice in the matter and where such charges are abnormally high; this provision shall not, however, apply to charges for collection of such reimbursements or payments, whether made in cash or otherwise;*

*(iv) membership subscriptions to associations or groups and arising from agreements separate from the credit agreement, even though such subscriptions have an effect on the credit terms;*

*(v) charges for insurance or guarantees; included are, however, those designed to ensure payment to the creditor, in the event of the death, invalidity, illness or unemployment of the consumer, of a sum equal to or less than the total amount of the credit togehter with relevant interest and other charges which have to be imposed by the creditor as a condition for credit being granted.*

*3. ( a) Where credit transactions referred to in this Directive are subject to the provisions of national laws in force on 1 March 1990 which impose maximum limits on the annual percentage rate of charge for such transactions and, where such provisions permit standard costs other than those described in paragraph 2 (i) to (v) not to be included in those maximum limits, Member States may, solely in respect of such transactions, not include the aforementioned costs when calculating the annual percentage rate of charge, as stipulated in this Directive, provided that there is a requirement in the cases mentioned in Article 3 and in the credit agreement, that the consumer be informed of the amount and inclusion thereof in the payments to be made.*

*( b) Member States may no longer apply point (a) from the date of entry into force of the single mathematical formula for calculating the annual percentage rate of charge in the Community, pursuant to the provisions of paragraph 5 ( c).*

*4. ( a) The annual percentage rate of charge shall be calculated at the time the credit contract is concluded, without prejudice to the provisions of Article 3 concerning advertisements and special offers.*

*( b) The calculation shall be made on the assumption that the credit contract is valid for the period agreed and that the creditor and the consumer fulfil their obligations under the terms and by the dates agreed.*

*5. ( a) As a transitional measure, notwithstanding the provisions of paragraph 1 ( a), Member States which, prior to 1 March 1990, applied legal provisions whereby a mathematical formula different from that given in Annex II could be used for calculating the annual percentage rate of charge, may continue applying that formula within their territory for a period of three years starting from 1 January 1993.*

*Member States shall take the appropriate measures to ensure that only one mathematical formula for calculating the annual percentage rate of charge is used within their territory.*

*( b) Six months before the expiry of the time limit laid down in point (a) the Commission shall submit to the Council a report, accompanied by a proposal, which will make it possible in the light of experience, to apply a single Community mathematical formula for calculating the annual percentage rate of charge.*

*( c) The Council shall, acting by a qualified majority on the basis of the proposal from the Commission, take a decision before 1 January 1996.*

*6. In the case of credit contracts containing clauses allowing variations in the rate of interest and the amount or level of other charges contained in the annual percentage rate of charge but unquantifiable at the time when it is calculated, the annual percentage rate of charge shall be calculated on the assumption that interest and other charges remain fixed and will apply until the end of the credit contract.*

*7. Where necessary, the following assumptions may be made in calculating the annual percentage rate of charge:*

*—if the contract does not specify a credit limit, the amount of credit granted shall be equal to the amount fixed by the relevant Member State, without exceeding a figure equivalent to ECU 2 000;*

*—if there is no fixed timetable for repayment, and one cannot be deduced from the terms of the agreement and the means for repaying the credit granted, the duration of the credit shall be deemed to be one year;*

*—unless otherwise specified, where the contract provides for more than one repayment date, the credit will be made available and the repayments made at the earliest time provided for in the agreement’.*

*3. Article 2 (3) shall be replaced by the following:*

*‘3. The provisions of Article 1 a and of Articles 4 to 12 shall not apply to credit agreements or agreements promising to grant credit, secured by mortgage on immovable property, insofar as these are not already excluded from the Directive under paragraph 1 ( a).’*

*4. The following subparagraph shall be added to Article 4 (2):*

*‘( c) a statement of the amount, number and frequency or dates of the payments which the consumer must make to repay the credit, as well as of the payments for interest and other charges; the total amount of these payments should also be indicated where possible;*

*( d) a statement of the cost items referred to in Article 1 a (2) with the exception of expenditure related to the breach of contractual obligations which were not included in the calculation of the annual percentage rate of charge but which have to be paid by the consumer in given circumstances, together with a statement indentifying such circumstances. Where the exact amount of those items is known, that sum is to be indicated; if that is not the case, either a method of calculation or as accurate an estimate as possible is to be provided where possible’.*

*5. Article 5 shall be deleted.*

*6. The Annex shall become Annex I and the following point shall be added to paragraph 1:*

*‘(ix) the obligation on the consumer to save a certain amount of money which must be placed in a special account’.*

*7. Annexes II and III attached hereto shall be added.*

*Article 2*

*1. Member States shall take the measures necessary to cumply with this Directive not later than 31 December 1992 and shall forthwith inform the Commission thereof.*

*2. Member States shall communicate to the Commission the texts of the main provisions of national law which they adopt in the field governed by this Directive.*

*Article 3*

*This Directive is addressed to the Member States.*

*Done at Brussels, 22 February 1990.*

*For the Council*

*The President*

*D.J. O’Malley*

*ANNEX*

*‘*

*Annex II*

*THE BASIC EQUATION EXPRESSING THE EQUIVALENCE OF LOANS AND REPAYMENTS AND CHARGES *

*Meaning of letters and symbols:*

*K*

*is the number of a loan*

*K′*

*is the number of a repayment or a payment of charges*

*AK*

*is the amount of loan number K*

*A′K′*

*is the amount of repayment number K′*

*represents a sum*

*m*

*is the number of the last loan*

*m′*

*is the number of the last repayment or payment of charges*

*tK*

*is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of subsequent loans Nos. 2 to m*

*tK′*

*is the interval expressed in years and fractions of a year between the date of loan No. 1 and those of repayments or payments of charges Nos. 1 to m′*

*i*

*is the percentage rate that can be calculated (either by algebra, by successive approximations, or by a computer programme) where the other terms in the equation are known from the contract or otherwise.*

*Remarks*

*( a) The amounts paid by both parties at different times shall not necessarily be equal and shall not necessarily be paid at equal intervals.*

*( b) The starting date shall be that of the first loan.*

*( c) Intervals between dates used in the calculations shall be expressed in years or in fractions of a year.*

*Annex III*

*EXAMPLES OF CALCULATIONS*

*First example*

*Sum loaned S = ECU 1 000.*

*It is repaid in a single payment of ECU 1 200 made 18 months, i.e. 1,5 years, after the date of the loan.*

*The equation becomes 1000 =*

*1200*

*_______*

*(1 + i) 1,5*

*or (1 + i) 1,5*

*= 1,2*

*1 + i*

*= 1,129243*

*i*

*= 0,129243*

*This amount will be rounded down to 12,9% or 12,92% depending on whether the State or habitual practice allows the percentage to be rounded off to the first or second decimal.*

*Second example*

*The sum agreed is S = ECU 1 000 but the creditor retains ECU 50 for enquiry and administrative expenses, so that the loan is in fact ECU 950; the repayment of ECU 1 200, as in the first example, is made 18 months after the date of the loan.*

*The equation becomes 950 =*

*1200*

*_______*

*(1 + i) 1,5*

*or (1 + i) 1,5*

*=*

*1200*

*______*

*950*

*= 1,263157*

*1 + i*

*=*

*1,16851 …*

*i*

*=*

*1,16851 … rounded off to 16,9% or 16,85%.*

*Third example*

*The sum lent is ECU 1 000, repayable in two amounts each of ECU 600, paid after one and two years respectively.*

*The equation becomes 1000*

*=*

*600*

*_________*

*(1 + i)*

*+*

*600*

*_________*

*(1 + i) 2;*

*it is solved by algebra and produces i = 0,1306623, rounded off to 13,1% or 13,07%.*

*Fourth example*

*The sum lent is ECU 1 000 and the amounts to be paid by the borrower are:*

*After three months*

*(0,25 years)*

*ECU 272*

*After six months*

*(0,50 years)*

*ECU 272*

*After twelve months (1 year)*

*(1 year)*

*ECU 544*

*_________*

*Total*

*ECU 1 088*

*The equation becomes:*

*1000*

*=*

*272*

*_________*

*(1 + i) 0.25*

*+*

*272*

*_________*

*(1 + 0) 0.50*

*+*

*544*

*______*

*(1 + i)*

*This equation allows i to be calculated by successive approximations, which can be programmed on a ocket computer.*

*The result is:*

*i = 0,1321 rounded off 13,2 or 13,21%.’*

*F133 [ Part III*

*DIRECTIVE 98/7/EC*

*OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 February 1998*

*amending Directive 87/102/EEC for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit*

*THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,*

*Having regard to the Treaty establishing the European Community, and in particular Article 100a thereof,*

*Having regard to the proposal of the Commission (1) .*

*Having regard to the opinion of the Economic and Social Committee (2) ,*

*Acting in accordance with the procedure laid down in Article 189b of the Treaty (3)*

*Whereas it is desirable, in order to promote the establishment and functioning of the internal market and to ensure that consumers benefit from a high level of protection, that a single method of calculating the annual percentage rate of charge for consumer credit should be used throughout the Community;*

*Whereas Article 5 of Directive 87/102/EEC (4) provides for the introduction of a Community method or methods of calculating the annual percentage rate of charge;*

*Whereas, in order to introduce this single method, it is desirable to draw up a single methematical formula for calculating the annual percentage rate of charge and for determining the credit cost items to be used in the calculation by indicating those costs which must not be taken into account;*

*Whereas Annex II of Directive 87/102/EEC introduced a mathematical formula for the calculation of the annual percentage rate of charge and Article 1a(2) of that Directive provided for the charges to be excluded from the calculation of the ‘ total cost of credit to the consumer ’ .*

*Whereas during a transitional period of three years from January 1993, Member States which prior to 1 March 1990 applied laws which permitted the use of another mathematical formula for calculating the annual percentage rate of charge, were permitted to continue to apply such laws;*

*Whereas the Commission has submitted a Report to the Council which makes it possible, in the light of experience, to apply a single Community mathematical formula for calculating the annual percentage rate of charge;*

*Whereas, since no Member State has made use of Article 1a(3) of Directive 87/102/EEC by which certain costs were excluded from the calculation of the annual percentage rate of charge in certain Member States, it has become obsolete;*

*Whereas accuracy to at least one decimal place is necessary;*

*Whereas a year is presumed to have 365 or 365,25 days or (for leap years) 366 days, 52 weeks or 12 equal months; whereas an equal month is persumed to have 30,41666 days;*

*Whereas it is desirable that consumers should be able to recognize the terms used different Member States to indicate the ‘ annual percentage rate of charge ’ ;*

*Whereas it is appropriate to study without delay to what extent a further degree of harmonization of the cost elements of consumer credit is necessary in order to put the European consumer in a position to make a better comparison between the actual percentage rates of charges offered by institutions in the various Member State, thereby ensuring harmonious functioning of the internal market,*

*HAVE ADOPTED THIS DIRECTIVE:*

*Article 1*

*Directive 87/102/EEC shall be amended as follows:*

*( a ) Article 1a(1)(a) shall be replaced by the following:*

*— in the Greek language version of the Directive:*

*…*

*— in the English language version of the Directive:*

*‘ The annual percentage rate of charge which shall be that rate, on an annual basis which equalizes the present value of all commitments (loans, repayments and charges), future or existing, agreed by the creditor and the borrower, shall be calculated in accordance with the mathematical formula set out in Annex II. ’ ;*

*( b ) Article 1a(3) shall be deleted;*

*( c ) Article 1a(5) shall be deleted;*

*( d ) Article 3 shall be replaced by the following:*

*‘ Without prejudice to Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising (*) , and to the rules and principles applicable to unfair advertising, any advertisement, or any offer which is displayed at business premises, in which a person offers credit or offers to arrange a credit agreement and in which a rate of interest or any figures relating to the cost of the credit are indicated, shall also include a statement of the annual percentage rate of charge, by means of a*

*( e ) Annex II shall be replaced by the text of Annex I representative example if no other means is practicable.*

*attached hereto;*

*( f ) Annex III shall be replaced by the text of Annex II attached hereto.*

*Article 2*

*1. Member States shall bring into force the laws, regulations and administrative provisions necessary for them to comply with this Directive no later than two years after the entry into force of this Directive. They shall inform the Commission thereof.*

*When Member States adopt those measures, they shall contain a reference to this Directive or shall be accompained by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.*

*2. The Member States shall communicate to the Commission the texts of the provisions of national law which they adopt in the field governed by this Directive.*

*Article 3*

*This Directive is addressed to the Member States.*

*Done at Brussels, 16 February 1998.*

*For the European Parliament*

*For the Council*

*The President*

*The President*

*J.M. GIL-ROBLES*

*J. CUNNINGHAM*

*ANNEX I*

*ANNEX II*

*THE BASIC EQUATION EXPRESSING THE EQUIVALENCE OF LOANS ON THE ONE HAND AND REPAYMENTS AND CHARGES ON THE OTHER*

*Meaning of letters and symbols:*

*K is the number of a loan*

*K ’ is the number of a repayment or a payment of charges*

*A k is the amount of loan number K*

*A ’ k ’ is the amount of repayment number K ’*

*∑ represents a sum*

*m is the number of the last loan*

*m ’ is the number of the last repayment or payment of charges*

*tk ’ is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of subsequent loans Nos 2 to m*

*tk ’ is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of repayments or payments of charges Nos 1 to m ’*

*i is the percentage rate that can be calculated (either by algegra, by successive approximations, or by a computer programme) where the other terms in the equation are known from the contract or otherwise.*

*Remarks:*

*( a ) The amounts paid by both parties at different times shall not necessarily be equal and shall not necessarily be paid at equal intervals.*

*( b ) The starting date shall be that of the first loan.*

*( c ) Intervals between dates used in the calculations shall be expressed in years or in fractions of a year. A year is presumed to have 365 days or 365,25 days or (for leap years) 366 days, 52 weeks or 12 equal months. An equal month is presumed to have 30,41666 days (i.e. 365/12).*

*( d ) The result of the calculation shall be expressed with an accuracy of at least one decimal place. When rounding to a particular decimal place the following rule shall apply:*

*If the figure at the decimal place following this particular decimal place is greater than or equal to 5, the figure at this particular decimal place shall be increased by one.*

*( e ) Member States shall provide that the methods of resolution applicable give a result equal to that of the examples presented in Annex III. ’*

*ANNEX II*

*‘ ANNEX III*

*EXAMPLES OF CALCULATION*

*A. CALCULATION OF THE ANNUAL PERCENTAGE RATE OF CHARGE ON A CALENDAR BASIS (1 YEAR = 365 DAYS (OR 366 DAYS FOR LEAP YEARS)*

*First example*

*Sum loaned: S = ECU 1000 on 1 January 1994.*

*It is repaid in a single payment of ECU 1200 made on 1 July 1995 i.e. 1 1/2 years or 546 (= 365 + 181) days after the date of the loan,*

*The equation becomes: 1,000 =*

*1200*

*(1+ i ) 546/365*

*or:*

*(1+ i ) 546/365 = 1,2*

*1+ i = 1,1296204*

*i = 0,1296204*

*This amount will be rounded to 13% (or 12,96% if an accuracy of two decimal places is preferred).*

*Second example*

*The sum loaned is S = ECU 1,000, but the creditor retains ECU 50 for administrative expenses, so that the loan is in fact ECU 950; the repayment of ECU 1,200, as in the first example, is again made on 1 July 1995.*

*The equation becomes: 950 =*

*1200*

*(1+ i ) 546/365*

*or:*

*(1+ i ) 546/365 = 1,263157*

*1+ i = 1,169026*

*i = 0,169026*

*This amount will be rounded to 16,9%.*

*Third example*

*The sum loaned is ECU 1,000, on 1 January 1994, repayable in two amounts, each ECU 600, paid after one and two years respectively.*

*The equation becomes:*

*1000 =*

*600*

*+*

*600*

*=*

*600*

*+*

*600*

*(1+ i )*

*(1+ i ) 730/365*

*(1+ i )*

*(1+ i ) 2*

*It is solved by algebra and produces i =0,1306623 rounded to 13,1% (or 13,07% if an accuracy of two decimal places is preferred).*

*Fourth example*

*The sum loaned is S= ECU 1,000, on 1 January 1994, and the amounts to be paid by the borrower are:*

*After 3 months (0.25 years/90 days):*

*ECU 272*

*After 6 months (0.5 years/181 days):*

*ECU 272*

*After 12 months (1 year/365 days):*

*ECU 544*

*Total:*

*ECU 1,088*

*The equation becomes:*

*1000 =*

*272*

*+*

*272*

*+*

*544*

*(1+ i ) 90/365*

*(1+ i ) 181/365*

*(1+ i ) 365/365*

*This equation allows i to be calculated by successive approximations, which can be programmed on a pocket calculation.*

*The result is i =0,13226 rounded to 13.2% (or 13,23% if an accuracy of two decimal places is preferred).*

*B. CALCULATION OF THE ANNUAL PERCENTAGE RATE OF CHARGE ON THE BASIS OF A STANDARD YEAR (1 YEAR = 365 DAYS OR 365,25 DAYS, 52 WEEKS, OR 12 EQUAL MONTHS)*

*First example*

*Sum loaned: S = ECU 1,000*

*It is repaid in a single payment of ECU 1,200 made in 1.5 years (i.e. 1,5 x 365=547,5 days, 1,5 x 365,25 = 547,875 days, 1.5 x 366 = 549 days, 1,5 x 12 = 18 months, or 1,5 x 52 =78 weeks) after the date of the loan.*

*The equation becomes:*

*1000 =*

*1,200*

*=*

*1,200*

*=*

*1,200*

*=*

*1,200*

*(1+ i ) 547,5/365*

*(1+ i ) 547,875/365*

*(1+ i ) 18/12*

*(1+ i ) 78/52*

*or:*

*(1+ i ) 1,5 = 1,2*

*1+ i = 1,129243*

*i = 0,129243*

*This amount will be rounded to 12,9% (or 12,92% if an accuracy of two decimal places is preferred).*

*Second example*

*The sum loaned is S = ECU 1,000, but the creditor retains ECU 50 for administrative expenses, so that the loan is in fact ECU 950; the repayment of ECU 1,200, as in the first example, is again made 1.5 years after the date of the loan.*

*The equation becomes:*

*950 =*

*1,200*

*=*

*1,200*

*=*

*1,200*

*=*

*1,200*

*(1+ i ) 547,5/365*

*(1+ i ) 547,875/365*

*(1+ i ) 18/12*

*(1+ i ) 78/52*

*or:*

*(1+ i ) 1,5 = 1200/950 = 1,263157*

*1+ i = 1,168526*

*i = 0,168526*

*This amount will be rounded to 16.9% (or 16.85% if an accuracy of two decimal places is preferred).*

*Third example*

*The sum loaned is ECU 1,000, repayable in two amounts, each of ECU 600, paid after one and two years respectively.*

*The equation becomes*

*1000 =*

*600*

*+*

*600*

*=*

*600*

*+*

*600*

*(1+ i ) 365/365*

*(1+ i ) 730/365*

*(1+ i ) 365,25/365,25*

*(1+ i ) 730,5/365,52*

*=*

*600*

*+*

*600*

*=*

*600*

*+*

*600*

*(1+ i ) 12/12*

*(1+ i ) 24/12*

*(1+ i ) 52/52*

*(1+ i ) 104/52*

*=*

*600*

*+*

*600*

*(1+ i ) 1*

*(1+ i ) 2*

*It is solved by algebra and produces i = 0,13066 which will be rounded to 13,1% (or 13,07% if an accuracy of two decimal places is preferred).*

*Fourth example*

*The sum loaned is S = ECU 1,000 and the amounts to be paid by the borrower are:*

*After 3 months (0,25 years/13 Weeks/91,25 days/91,3125 days):*

*ECU 272*

*After 6 months (0,5 years/26 Weeks/182,5 days/182,625 days):*

*ECU 272*

*After 12 months (1 year/52 weeks/365 days/365,25 days):*

*ECU 544*

*Total:*

*ECU 1,088*

*The equation becomes:*

*1000 =*

*272*

*+*

*272*

*+*

*544*

*(1+ i ) 91,25/365*

*(1+ i ) 182,5/365*

*(1+ i ) 365/365*

*=*

*272*

*+*

*272*

*+*

*544*

*(1+ i ) 91,3125/365,25*

*(1+ i ) 182,625/365,25*

*(1+ i ) 365,25/365,25*

*=*

*272*

*+*

*272*

*+*

*544*

*(1+ i ) 3/12*

*(1+ i ) 6/12*

*(1+ i ) 12/12*

*=*

*272*

*+*

*272*

*+*

*544*

*(1+ i ) 13/52*

*(1+ i ) 26/52*

*(1+ i ) 52/52*

*=*

*272*

*+*

*272*

*+*

*544*

*(1+ i ) 0,25*

*(1+ i ) 0,5*

*(1+ i ) 1*

*This equation allows i to be calculated by successive approximations, which can be programmed on a pocket calculator. The result is i = 0,13185 which will be rounded to 13,2% (or 13,19% if an accuracy of two decimal places is preferred). ]*

*Annotations:*

*Amendments:*

*F133*

*Inserted (20.09.2000) by European Communities (Consumer Credit) Regulations 2000 (S.I. No. 294 of 2000), reg. 5 and Table part 1.*

*(*) O.J. No. L250, 19.9.1984, p.17. Directive as last amended by Directive 97/55/EC (O.J. No. L280, 23.10.1997, p.18).*

*(1) OJ No C 80, 27.3.1979, p. 4 and OJ No C 183, 10.7.1984, p. 4.*

*(2) OJ No C 242, 12.9.1983, p. 10.*

*(3) OJ No C 113, 7.5.1980, p. 22.*

*(4) OJ No C 92, 25.4.1975, p. 1 and OJ No C 133, 3.6.1981, p. 1.*

*THIRD SCHEDULE*

*Forms of Notice to be Included in Agreements*

*Section 36 and 129 .*

*Part I*

*Form of Notice to be included on front page of a credit agreement.*

*IMPORTANT INFORMATION*

*1. Amount of credit advanced*

*: _____________________*

*2. Period of Agreement*

*: _____________________*

*3. Number of Repayment Instalments*

*: _____________________*

*4. Amount of Each Instalment*

*: _____________________*

*5. Total Amount Repayable*

*: _____________________*

*6. Cost of this credit (5 minus 1)*

*: _____________________*

*7. Annual Percentage Rate of Charge*

*: _____________________*

*N.B. You may withdraw from this agreement at any time within 10 days of receiving this agreement or a copy of it.*

*Part II*

*Form of Notice to be included on front page of a housing loan.*

*IMPORTANT INFORMATION*

*1. Amount of credit advanced*

*: _____________________*

*2. Period of Agreement*

*: _____________________*

*3. Number of Repayment Instalments*

*: _____________________*

*4. Amount of Each Instalment **

*: _____________________*

*5. Total Amount Repayable **

*: £____________________*

*6. Cost of this credit * (5 minus 1)*

*: _____________________*

*7. APR ***

*: ___________________%*

*8. Amount of endowment premium * (if applicable) :*

*: £____________________*

*9. Amount of mortgage protection premium * (if applicable) :*

*: £____________________*

*10. Effect on amount of instalment of 1% increase in first year in interest rate ****

*: _____________________*

**as calculated at the time of making agreement.*

***annual percentage rate of charge.*

****this is the amount by which the instalment repayment will change in the event of a 1% increase in the interest rate on which the above calculations are based.*

*Annotations:*

*Modifications (not altering text):*

*C19*

*Part I superseded (13.05.1996) by Consumer Credit Act, 1995 (Section 36) Regulations 1996 (S.I. No. 128 of 1996), reg. 2 and sch.*

*2. The forms of notice set out in Parts I and II in the Schedule to these Regulations shall be in lieu of the form of notice set out in Part 1 of the Third Schedule to the Consumer Credit Act, 1995 (No. 24 of 1995).*

*C20*

*Part II superseded (13.05.1996) by Consumer Credit Act, 1995 (Section 129) Regulations 1996 (S.I. No. 132 of 1996), reg. 2 and sch.*

*2. The form of notice set out in the Schedule to these Regulations shall be in lieu of the form of notice set out in Part II of the Third Schedule to the Consumer Credit Act, 1995 (No. 24 of 1995).*

*F134 [ FOURTH SCHEDULE*

*APR – METHOD OF CALCULATION*

*THE BASIC EQUATION EXPRESSING THE EQUIVALENCE OF LOANS ON THE ONE HAND AND REPAYMENTS AND CHARGES ON THE OTHER*

*Meaning of letters and symbols:*

*K is the number of a loan*

*K ’ is the number of a repayment or a payment of charges*

*A k is the amount of loan number K*

*A ’ k ’ is the amount of repayment number K ’*

*∑ represents a sum*

*m is the number of the last loan*

*m ’ is the number of the last repayment or payment of charges*

*tk is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of subsequent loans Nos 2 to m*

*tk ’ is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of repayments or payments of charges Nos 1 to m ’*

*i is the percentage rate that can be calculated (either by algegra, by successive approximations, or by a computer programme) where the other terms in the equation are known from the contract or otherwise.*

*Remarks:*

*( a ) The amounts paid by both parties at different times shall not necessarily be equal and shall not necessarily be paid at equal intervals.*

*( b ) The starting date shall be that of the first loan.*

*( c ) Intervals between dates used in the calculations shall be expressed in years or in fractions of a year. A year is presumed to have 365 days or 365,25 days or (for leap years) 366 days, 52 weeks or 12 equal months. An equal month is presumed to have 30,41666 days (i.e. 365/12).*

*(d) The result of the calculation shall be expressed with an accuracy of at least one decimal place. When rounding to a particular decimal place the following rule shall apply:*

*If the figure at the decimal place following this particular decimal place is greater than or equal to 5, the figure at this particular decimal place shall be increased by one.*

*( e ) Member States shall provide that the methods of resolution applicable give a result equal to that of the examples presented in Annex III. ]*

*Annotations:*

*Amendments:*

*F134*

*Substituted (20.09.2000) by European Communities (Consumer Credit) Regulations 2000 (S.I. No. 294 of 2000), reg. 5 and Table part 2.*

*SIXTH SCHEDULE*

*Record of Repayments*

*Section 100.*

*Form to be included in a repayment book in respect of a moneylending agreement.*

*SCHEDULE*

*£*

*Total Amount Repayable*

*_______________*

*Date*

*Amount of Repayment*

*Balance Now Due*

*Signature*

*EVENTH SCHEDULE*

*Consent to Collect Repayments Between the Hours of 8.00 a.m. and 10.00 a.m.*

*Section 110.*

*I [ OF ]1 HEREBY CONSENT TO [ ]2 OR AGENT COLLECTING REPAYMENTS BETWEEN THE HOURS OF 8.00 A.M. AND 10.00 A.M.*

*Signed:__________________________*

*Date:__________________________*

*I UNDERSTAND THAT I MAY CANCEL THIS CONSENT AT ANY TIME BY NOTIFYING THE LENDER EITHER BY USING THE CANCELLATION FORM BELOW OR BY WRITING TO THE LENDER OR HIS AGENT*

*Cancellation of Consent to Collect Repayments Between the Hours of 8.00 a.m. and 10.00 a.m.*

*TO [ ] 2*

*I [ ] 1 HEREBY WITHDRAW THE CONSENT I HAVE GIVEN FOR REPAYMENTS TO BE COLLECTED BETWEEN THE HOURS OF 8.00 A.M. AND 10.00 A.M.*

*Signed:__________________________*

*Date:__________________________*

*1 Insert name and address of borrower.*

*2 Insert name of moneylender.*

* *

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