Consumer loans: without zero rates and online

Jun 20 the full force earns a law “On consumer credit”, adopted in December last year to protect the rights of borrowers and settlement of disputes between them and the creditors. However, the law does not apply to already concluded contracts about consumer credits. “Today” figured out what will change for Ukrainians.


  • All the rules of lending are gathered in one law. This is important to prevent and resolve any disputes between creditors and borrowers.
  • A single standard form of loan agreement — passport of consumer credit. Previously, each Bank had its own contract. This will make it easier for customers to compare conditions in different banks, will allow to estimate future costs.
  • In the loan is prohibited to enter “0% rate” or “interest-free”. It is cheating the borrower because he actually overcharged in the form of one-off commissions for issuance of credit, for the monthly maintenance, insurance, etc.
  • Now it is possible to conclude the loan agreement in electronic form. This should lead to a decrease in operating expenses of the Bank and as a consequence — to lower interest rates on loans.
  • Entered the Institute of credit intermediaries. Determined their rights and obligations. This will allow banks to significantly reduce staff (actually outsourcing), which can also lower rates on loans.
  • WHAT HAS CHANGED. The new law finally puts things in order in relations between banks and borrowers. So, among other things, to replace the many credit agreements comes single passport credit. It should clearly indicate not only details of the parties, the amount and term of the loan, interest rate, etc., but also detailed, can change the interest rate, what is overpayment is actually taking into account all payments of commissions.

    This is very important, because previously lenders were not always disclosed to the client prior to the signing of the contract information about what percentage of him to lend money. Known cases where the real interest rate was 135% per annum at the average market rate for consumer credits 70-80%. That is, the borrower who took 1000 UAH in a year had to return 2350 UAH! Prohibited now and the fine print in the Treaty text, “hiding” all sorts of additional terms and payments — all conditions must be spelled the same.

    Another important aspect is the change of order of payment default loan. If before first, was charged on an outstanding debt, then penalties and interest and, last but not least, current payments on the loan and interest, now first paid “debts” and “body” with interest, and then penalties. As explained by one of the authors of the bill Pavlo rizanenko, the old order has led to the fact that the debtor actually put “on the counter” all the money made went to pay the fines, and the debt is not reduced.

    EXPERTS. In the Independent Association of banks of Ukraine the new law support it. “We expect that he will restore trust between banks and the population, — says the head of the Council of NABOO Roman Shpek. — Introduced common rules for advertising and presenting information about loans. No more “zero” rates, which are actually not, for violation of the establishes liability. This creates equal conditions for healthy competition among banks. It is important that everyone who wants to take a loan immediately know is not nominal and the real rate on the loan, that is what he eventually paid including commissions and other payments. This will allow the borrower to correctly evaluate your options before you borrow, and banks — to reduce the share of problem loans”.

    But an expert finrynka Yegor Tishin sure that the law is too protect borrowers and not enough lenders. “There are controversial point of law, which says that the borrower shall in writing, under signature, to report all additional fees. But sometimes this is not possible (for example, a loan taken two years, but unknown value of a life insurance customer in a year). In the end, after two years, the consumer may apply to the court, lied to him and he asks to cancel the contract, win the case and return the loan without interest”.

    Pawnshops will limit penalties

    The law on consumer crediting does not apply to pawnshops and other non-Bank institutions, giving small loans — up to 3200 UAH per 1-2 months. The national Commission for financial services has said that developing their own lending rules. The main thing — to limit the amount of fines for delay in the may 10-15 time exceed the amount of the loan. “Small loans penalties of 1.5—2% per day (540-720% per annum! — Ed.). It is planned to limit the penalty of a double discount rate of NBU (she is now 12.5%, respectively the penalty will be up to 25%), and the penalty is 15% of the overdue payment”, — told us the Commission. Association of financial institutions promised in response to raise rates on such loans. Their argument — money is issued without checking the solvency of the borrower, so the risk of default and forced is blocked by high fines.