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 and 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 a 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:
- within three days to inform the Bank about changes in the place of residence, passport details, contact numbers, 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;
- during the term of the Loan Agreement, without prior agreement with the Bank:
- not to receive loans from other banks;
- not to alienate movable and immovable property;
- not to provide surety to secure obligations of other legal entities and/or individuals;
- not to change the terms of the agreements, payments under which are made at the expense of loan funds received by the Borrower under the Loan Agreement;
- - when the Bank conducts inspections of the intended use of loan funds, the availability and conditions of keeping the pledged property, analysis of the Borrower’s financial position, to provide the Bank with the originals and copies of all necessary documents and do not obstruct the conduct of such inspections. In the event that a restricted access mode has been introduced in the territory where the pledged property is kept, to provide authorized employees of the Bank with appropriate documents (authorizations) for free movement in the territory and exercise of the Bank’s rights provided for in the Loan Agreement;
- - to notify the Bank of the circumstances indicating the existence of rights and claims of third parties to pledged property within three days as from the time when the said circumstances became known to the Borrower;
- - within 7 (seven) calendar days as from the date of submission of a written notice of withdrawal from the Loan Agreement, to repay to the Bank the funds received under the Loan Agreement and pay interest for the period as from the date of receipt of funds until the day of repayment thereof at the rate established by the Loan Agreement.
- in case of violation by the Borrower of the terms of the intended use of loan funds, 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.
- in case of failure to conclude a pledge agreement within the term specified in the Loan Agreement due to the Borrower’s fault, the latter shall pay to the Bank a fine for delay in concluding the pledge (mortgage) agreement for more than 10 calendar days – in the amount of 0.5% (zero point five percent) of the loan amount; for delay in concluding the pledge (mortgage) agreement for more than 20 calendar days – in the amount of 1% (one percent) of the loan amount; for delay in concluding a pledge (mortgage) agreement for more than 30 calendar days – in the amount of 2% (two percent) of the loan amount (this clause applies in case of granting a loan for a subsequent property mortgage and/or pledge).