Right to cancel a loan vanishes once it's fully repaid

In Germany, consumers have a right to withdraw from loan agreements – but only while the contract is still active. Once you’ve made your last payment, that right is gone. The Federal Court of Justice confirmed this in May 2026, following a 2023 EU ruling.

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Cancellation right ends with the final loan payment

Germany gives borrowers a right to withdraw (Widerrufsrecht) from consumer loan agreements – similar to the cooling-off period you might know from online shopping, but it can apply to car loans and personal credit too. However, the Federal Court of Justice (Bundesgerichtshof, BGH) ruled on 19 May 2026 (case no. XI ZR 110/24) that this right disappears once the loan has been fully repaid. The decision follows a 2023 ruling by the European Court of Justice (C-38/21 and others), which drew the same line across all EU member states.

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Borrower tried to cancel a loan he had already paid off

A consumer in Germany had taken out a loan, repaid every instalment, and then tried to formally withdraw from the contract afterwards – hoping to reclaim interest paid or undo the deal. Both the Regional Court of Braunschweig (5 O 121/21) and the Higher Regional Court of Braunschweig (4 U 18/24) rejected his claim. The BGH confirmed those decisions. In Germany, a Widerruf (withdrawal) is a formal legal act that unwinds a contract – but there has to be a contract left to unwind.