Groundbreaking ruling of the CJEU regarding interest on loan costs.

On April 23, 2026, the Court of Justice of the European Union issued a ruling in case C-744/24. This ruling could change the situation for millions of Polish borrowers. If you have or had a cash loan or consumer credit, this article is for you.

What is the ruling of the CJEU about?

Case C-744/24 (P.W. against Bank Polska Kasa Opieki S.A.) was meant to resolve one of the most contentious issues in the Polish consumer credit market: whether a bank can charge interest not only on the amount actually disbursed to the consumer but also on the financed non-interest costs, particularly commissions.

In simpler terms: the dispute concerned a common banking practice known as “financing costs.” This means that when a bank grants a loan, it adds its own remuneration, such as a commission, to the principal. As a result, the consumer pays interest not only on the amount they actually received in their account but also on costs that immediately returned to the bank.

The case began in a small court in Włodawa. The judge referred questions to Luxembourg during a trial against Bank Pekao. It concerned a consumer loan of 150,000 zlotys, where the client actually received only about 133,000 zlotys from the bank.

Until now, the jurisprudence of Polish common courts was not uniform in this regard – some courts questioned the charging of interest on commissions, while others considered it an acceptable practice. From now on, Polish courts must strictly adhere to the CJEU ruling.

What did the Court rule?

Charging interest on all loan costs, and not just on the amount actually disbursed to the client, violates European law – according to the ruling in case C-744/24. Banks and loan companies must also clearly, precisely, and comprehensively inform clients about how they calculate interest and what the additional costs of the loan are.

The CJEU stated that under Directive 2008/48/EC, the terms “total amount of credit” and “total cost of credit borne by the consumer” are separate. The total amount of credit includes only the funds made available under the loan agreement. This amount cannot include amounts intended to fulfill obligations undertaken under the loan agreement, such as administrative costs, interest, and commissions.

What does this mean in practice for borrowers?

The ruling opens the way to utilize the so-called free credit sanction (SKD). The free credit sanction is a legal institution that allows the consumer to avoid loan costs, such as interest, commissions, and other fees, in the event of a breach by the lender of the informational obligations arising from the consumer credit law. This means that the consumer pays only the principal, without any additional costs. The ruling will apply to all banks and loan companies in Poland that practiced financing costs and charging interest on them.

What if the loan has already been repaid?

The right to utilize the free credit sanction is valid for one year from the date of executing the agreement.

How to check if your agreement is defective?

Defects in loan agreements that may justify utilizing the free credit sanction include primarily: (i) charging interest on commissions and other costs that were not actually disbursed to the consumer; (ii) incorrect calculation or provision of the APRC (Actual Annual Percentage Rate). Both underestimating and overestimating the APRC can mislead the consumer regarding the actual cost of the loan. The CJEU clearly indicated that any incorrect indication of the APRC is a violation of the law; (iii) unclear or imprecise conditions for changing fees during the term of the agreement; (iv) lack of clear information on the amount from which the bank charges interest.

One of the most serious consequences of financing costs is the distortion of the APRC indicator. When the bank includes the commission amount in the interest base, the total amount of the loan becomes artificially inflated. Since the APRC is the ratio of the total cost of the loan to the total amount of the loan, its percentage value decreases. As a result, the loan appears cheaper than it actually is. As analyses show, the difference in APRC can be several percentage points, which over the entire loan period translates into thousands of zlotys of unjustly charged interest.

Why is it worth acting now?

Today’s CJEU ruling is a signal that the jurisprudence of Polish courts will develop in favor of consumers. The ruling in case C-744/24 will have a binding effect across the EU, meaning that the Court’s interpretation of EU law will apply to both Polish courts and courts in other countries when resolving similar disputes. This ruling aims to unify the interpretation of EU regulations regarding consumer loans and the informational obligations of financial institutions.

However, it is worth remembering that each case is different and requires individual analysis. In practice, this may mean that although consumers have gained a strong argument in disputes with banks, the courts will decide whether in a specific case it is justified to apply the free credit sanction.

Olender Legal Office – we will check your agreement

We deal with cases related to the free credit sanction. We know what to pay attention to in the agreement, what mistakes banks make, and how to effectively assert your rights in court.

If you have or had a cash loan or consumer credit, contact us. We will analyze your agreement and assess whether you have grounds to utilize the free credit sanction.

You can read more about what the free credit sanction is and what conditions must be met in our article on the Law Office’s website.