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of November 15, 2016 No. 1734-VIII

About consumer crediting

(as amended on 13-05-2020)

This Law determines general legal and organizational basis of consumer crediting in Ukraine according to international legal standards in this sphere.

Section I General provisions

Article 1. Determination of terms

1. In this Law the following basic concepts are used:

1) the agreement on consumer loan - type of the credit agreement by which the creditor shall grant consumer loan in the amount of and on the conditions provided by the agreement and the consumer (borrower) shall return the credit and pay interests on credit on the conditions established by the agreement;

2) total cost of the credit for the consumer - the amount of general loan amount and total expenses on consumer loan;

3) general loan amount - the amount of the means provided and/or can be provided to the consumer under the agreement on consumer loan;

4) total expenses on consumer loan - the consumer's costs connected with obtaining, servicing and repayment of the loan, including interests on credit, the commissions and other obligatory payments for the additional and accompanying services of the loan provider, the credit intermediary (in the presence) and the third parties;

5) credit line - type of loan which provision is performed completely or parts in the terms coordinated by the parties during crediting term. At the same time the right of the consumer to obtain the credit within the set credit limit in case of partial or complete loan repayment during the term of the crediting determined in the agreement on consumer loan can be provided;

6) the credit intermediary - physical person, physical person entrepreneur or the legal entity who does not act as the loan provider and renders intermediary services in the sphere of consumer crediting from name, in interests and at the request of the loan provider or on its own behalf for the benefit of the loan provider;

7) the creditor - bank or other financial institution which according to the law has the right to grant consumer loans;

8) real annual interest rate - the total expenses on consumer loan expressed as a percentage annual from the general size of the issued credit;

9) the consumer - the physical person which signed or intends to sign the agreement on consumer loan;

10) consumer crediting - legal relationship on provision, servicing and return of consumer loan;

11) consumer loan (credit) - the money provided to the consumer (borrower) on purchase of goods (works, services) for satisfaction of the needs which are not connected with business, independent professional activity or accomplishment of obligations of hired employee.

2. Other terms in this Law are used in the value given in the Civil code of Ukraine, the Law of Ukraine "About consumer protection" and the laws of Ukraine concerning regulation of the markets of financial services.

Article 2. Law purpose

1. The purpose of this Law is protection of the rights and legitimate interests of consumers and loan providers, creation of proper competitive environment in the markets of financial services and increase in trust to it, providing favorable conditions for development of economy of Ukraine, harmonization of the legislation of Ukraine with the European Union law and international standards.

Article 3. Law coverage

1. This Law governs the relations between the Loan provider, credit intermediaries and consumers in case of provision of services of consumer crediting.

2. This Law does not extend on:

1) the agreements containing condition about consumer loan in the form of crediting of the account from loan repayment period to one month and the credit agreements signed for a period of up to one month;

2) loan agreements which do not provide interest payment or any other payments for use of the money provided under such agreements;

3) credit agreements which purpose is provision to the consumer of the right to make transactions with financial instruments if such transactions are made with participation or with mediation of the loan provider or other professional participant of the security market;

4) the loans granted under the agreements signed as a result of dispute settlement by the conclusion of the voluntary settlement approved by court;

5) the loans granted only within the appropriate state programs or programs of local government bodies to certain circle of physical persons also provide separate, determined by such programs, terms for crediting, including interest payment for use of the credit;

6) the unauthorized overdraft which is excess of the transaction amount which is carried out on the account over the amount of the set credit limit which is caused by the contract between the loan provider and the consumer and is not predicted by the size and time of origin;

7) credit agreements according to which general loan amount does not exceed one minimum wage established on the date of the conclusion of the credit agreement;

8) the loans granted by pawnshops in case of transfer of subject of pledge on preserving pawnshop if only obligations of the consumer are limited to pledge subject cost.

3. Only requirements of part one, part two Items 1 and 2 of Article 7, of Articles 8 - 10, parts one - the fourth article 12, of article 13, of Article part six 15, of article 18 of this Law are applied to the credits in the form of crediting of the account with loan repayment period which constitutes from one to three months or on demand.

4. Provision (obtaining) of consumer loans in foreign currency in the territory of Ukraine is forbidden.

Article 4. Legislation on consumer crediting

1. The legislation on consumer crediting in Ukraine is based on the Constitution of Ukraine and consists of this Law and other regulatory legal acts on the consumer service delivery.

2. If the international treaty which consent to be bound is provided by the Verkhovna Rada of Ukraine establishes other rules, than the legislation of Ukraine, rules of the international treaty are applied.


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