small loans in Italy

In Italy, small consumer loans are dominated by banks and specialised consumer credit companies (società finanziarie), and they come in some forms that are rare elsewhere. The best known is the cessione del quinto, a loan repaid directly from salary or pension. Italy also has a long-standing anti-usury law, which sets a maximum rate for each category of loan, and an out-of-court dispute body that many borrowers use successfully.

This guide explains the main types of small credit, the rules that protect you, how to compare costs and where to find help. Mini-pret.com does not lend, broker loans or recommend any lender; it provides independent information.

Who can lend in Italy

Lending to the public is reserved to banks and to financial intermediaries entered in the register kept under the Consolidated Banking Act (Testo Unico Bancario). Both are supervised by the Banca d'Italia. Credit agents and credit brokers (agenti in attività finanziaria and mediatori creditizi) must be registered with the OAM, the body that keeps the lists of these professionals. Before signing, check that both the lender and any intermediary appear in the official registers.

Lenders from other EU countries can operate in Italy under the European passport, but Italian consumer protection rules still apply to contracts with Italian consumers.

Main types of small credit

Prestito personale

An unsecured personal loan with fixed instalments, not tied to a specific purchase. It is offered by banks and finance companies and assessed on income and credit history.

Prestito finalizzato

A loan linked to a specific purchase, such as a household appliance, a car or a course, usually arranged at the point of sale. Promotional "zero rate" offers are common, but check whether fees for the file or for monthly statements are added.

Cessione del quinto

Instalments are deducted directly from salary or pension and cannot exceed one fifth of the net monthly amount. It is available to employees and pensioners, often including those with a weak credit record, because the repayment is taken at source. Life and employment insurance are mandatory. The structure is secure for the lender, but the cost varies significantly between offers, so compare carefully.

Credit cards and revolving credit

Revolving cards (carte revolving) let you repay a balance in small instalments. They are flexible but usually among the most expensive forms of credit.

TAEG, usury thresholds and your rights

Italian consumer credit rules, which implement the EU directive, require lenders to give you the standard European information sheet (SECCI) before signing. The key figure to compare is the TAEG (tasso annuo effettivo globale), Italy's APR, which includes interest and most mandatory costs. You also have a 14-day right of withdrawal and the right to repay early.

Under the anti-usury law, the Banca d'Italia's surveys are used to set quarterly tassi soglia (usury thresholds) for each category of loan, published by the Ministry of Economy and Finance. A rate above the threshold is unlawful. You can check the current thresholds for the loan type you are considering. If you have a dispute with a lender, you can complain to it first and then apply to the Arbitro Bancario Finanziario (ABF), an out-of-court system that is inexpensive to use.

Credit records: CRIF and the Centrale dei Rischi

Lenders in Italy rely on private credit information systems, the best known being CRIF, as well as on the Centrale dei Rischi of the Banca d'Italia, which records larger exposures and defaults. A late payment can be reported after a prior warning, and negative information remains visible for a period that depends on the seriousness of the delay. You can request access to your data free of charge and ask for errors to be corrected. For borrowers with a damaged record, our guide to loans with poor credit explains the options and the risks.

Checklist before signing

• Check the lender in the Banca d'Italia registers and any agent or broker in the OAM lists.
• Compare the TAEG and the total amount payable (importo totale dovuto) for the same sum and duration.
• Check the current usury threshold for that loan category.
• Look for file opening fees, monthly statement charges and insurance premiums.
• For a cessione del quinto, compare several quotes and read the insurance terms.
• Estimate the monthly cost with our loan repayment calculator.

Help, microcredit and alternatives

When debt becomes unmanageable, Italy offers formal procedures for over-indebted individuals (sovraindebitamento), now part of the Code of business crisis and insolvency. Debt crisis composition bodies (OCC) help prepare a restructuring plan. Several anti-usury foundations and associations also provide free support and, in some cases, access to guaranteed loans for people at risk of turning to loan sharks.

Other alternatives include:

• social microcredit projects run by foundations, dioceses or local authorities;
• a payment plan agreed with the creditor or utility company;
• local social services and municipal emergency support;
• help from family, with a written agreement.

For an idea of how supported lending works, see our page on social micro-credit.

Scam warning signs

• Advertisements promising loans "even to protestati or cattivi pagatori" without checks.
• Requests for advance payments for "practice fees", insurance or stamp duty.
• "Private lenders" on social networks or messaging apps.
• Companies not found in the Banca d'Italia or OAM registers.
• Interest that appears above the usury threshold, or informal lending outside any contract.

Usury and fake lending are crimes in Italy; if you have been approached or have paid money, report it to the police or Carabinieri and contact your bank. With a clear TAEG, a registered lender and a quick check of the usury threshold, most of the risks of small credit in Italy can be avoided.