Potential risks for the client in using consumer loans
Concluding and servicing a consumer loan agreement in accordance with a certain lending programme requires the borrower to pay for services of the bank and/or third parties. Read more in the Documents section
Risk of late fulfilment of obligations under the consumer loan agreement in case of poor understanding of the terms/documents before concluding the loan agreement and/or mortgage agreement (pledge, surety).
Risk of scams associated with unauthorised use of client identity documents/data.
In case the borrower violates the terms of the loan agreement, the borrower pays a penalty (fine, penalty).
In cases provided for in the loan agreement and/or mortgage agreement (pledge, surety), the bank is entitled: to demand early repayment of loan payments and compensation for damages inflicted on the bank in breach of obligation, to recover mortgaged housing, property rights to it or other immovable/movable property according to Ukrainian legislation, and in case of insufficient funds received from the sale in the mortgage (pledge) of property, to repay the claim under the consumer loan agreement, the client's personal property may be levied to repay the loan, to apply to court in accordance with the procedure specified in the Ukrainian legislation.
The bank is entitled to transfer information on indebtedness to the credit bureau/Credit Register of the National Bank of Ukraine, including negative credit history, which may be taken into account by the bank when making a decision on granting a loan in the future.
Currency risks: Purchase and sale of currency to fulfil obligations under the loan agreement is carried out at the initiative of the bank only upon contractual debiting of funds from the client’s accounts. When buying and selling foreign currency, the Bank applies the current market exchange rate on the date of buying and selling foreign currency, and the bank fee for buying/selling foreign currency for UAH is charged in accordance with the Pivdenny Bank tariffs. Read more
The bank is not allowed to require customers to purchase any goods or services from the bank or its affiliates or partners as a mandatory condition for the provision of these services (except for the banking package).
The bank has no right to unilaterally make changes to agreements concluded with customers, unless otherwise provided by the agreement or the law.
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Potential risks for the client in case of failure to fulfill obligations under the Loan Agreement regarding consumer lending
The amount of a penalty charged by the Bank may not exceed half of the amount received by the Borrower under the Loan Agreement, and may not be increased by agreement of the parties, subject to the requirements of Part 3 of Article 21 of the Law of Ukraine “On Consumer Lending”, namely:
- in case of delay in loan payments, the Borrower shall pay a penalty in the amount of double discount rate of the National Bank of Ukraine, which was in effect during the period of delay. The penalty shall be paid for each day of delay in fulfillment of obligations, starting from the first day of delay, including the date of payment. The penalty shall be charged on the overdue amount and cannot exceed 15% (fifteen percent) of the overdue amount. The penalty shall be calculated on the basis of conditional number of days in a year – 360, and actual number of days in a month;
- in case of delay in interest or other payments, the Borrower shall pay a fine in the amount calculated according to the formula: 1% (one percent) of the overdue amount × n, where n is the number of days of delay;
- in case of violation of the Loan Agreement, the Borrower shall pay a fine in the amount of 2% (two percent) of the loan amount for each case of such violation, namely:
- to inform the Bank within three days about changes in the place of employment and/or residence, passport details, the client’s financial phone number, place of work, opened accounts and obtained loans with other banks, as well as about the creation of economic structures with the participation of the Borrower’s capital, about the initiation of a criminal case against the Borrower or about civil disputes involving the Borrower;
- at least once a year to provide the Bank with information that characterizes the Borrower’s financial position in order to assess the Borrower’s financial position (certificates of the Borrower’s personal income and income of his/her family members issued by the employer, if any – income declarations, other documents that confirm permanent income of the Borrower and income of his/her family members), and at the Bank’s first request: statements of current accounts opened with other banks, certificates of availability of loans with other banks, issued directly by other banks;
- when the Bank conducts inspections of the intended use of loan funds, analysis of the Borrower’s financial position, to provide the Bank with the originals and copies of all necessary documents and not to obstruct the conduct of such inspections;
- in case of early repayment of the loan (portion thereof), to observe the debt payment procedure established by the Loan Agreement;
- to conclude life insurance contracts with an insurance company approved by the Bank, and during the entire term provided for in the Loan Agreement if the insurance is provided for by the terms of the lending programs published on the Bank’s website, to ensure the validity of these insurance contracts, contribute insurance payments in accordance with the terms of the insurance contracts. The insurance payments under the insurance contracts for the first year of loan use shall be paid by the Borrower before the loan is granted. The insurance payments under the insurance contracts in the second and subsequent years of loan use shall be paid no later than 5 (five) business days prior to expiration of the term covered by the previous insurance payment. When payments are made by the insurer under the insurance contract, the Borrower is obliged to make additional insurance payments within 3 (three) business days as from the date of each such payment, in order to renew the insurance amount to the required level. In case of termination of the insurance contract in connection with the fulfillment of obligations by the insurer to the fullest extent, the Borrower is obliged to conclude a new insurance contract within 3 (three) business days as from the date of termination. The insurance amount under the life insurance contracts concluded by the Borrower pursuant to this clause of the Agreement must be no less than the loan amount in the first year of the term of this Agreement, and no less than the loan balance on the expiry date of the first and each subsequent year of loan use in the second and subsequent years of the term of this Agreement. In order to confirm the fulfillment of obligations provided for by this clause of the Agreement, the Borrower shall provide the Bank with relevant documents (copies of insurance contracts, payment documents, etc.);
- to fulfill the Bank’s request for the provision of a collateral (to be provided by the Bank), by concluding a relevant contract no later than 10 (ten) business days as from the date on which the Bank sends relevant request to the Borrower’s address or the Borrower or his/her representative receives the request against signature.
- if the Borrower violates the following conditions: three days before the date of dismissal from the current place of work, to notify the Bank of such dismissal, repay the loan, pay the accrued interest for loan use to the fullest extent, in compliance with the debt payment procedure established by the Loan Agreement (if the loan is granted to an employee of the Bank), the Borrower shall pay a fine in the amount of 5% (five percent) of the loan amount used for the purposes not provided for in the Loan Agreement.