The purpose of this legislative act is to ensure the protection of borrowers' rights and their legitimate interests, as well as to increase the transparency and comparability of lending conditions. The law is also aimed at preventing excessive debt burdens, avoiding unfair practices, and promoting a responsible approach to lending.
It should be noted that this law does not apply to loans related to the purchase, construction, or completion of residential real estate secured by the property itself, except in cases explicitly stated in the law.
The regulation under this law covers:
- the process of providing consumer loans;
- conditions related to the consumer credit agreement;
- the calculation and application of the borrower's debt burden indicator;
- conditions for amending and terminating the agreement;
- the rights and obligations of both the borrower and the lender;
- methods for resolving disputes and protecting the borrower's rights.
Key restrictions:
- The total amount of charges (including interest, fees, penalties, and fines), including restructuring, cannot exceed 60% of the amount of the provided loan.
- If the borrower's debt burden indicator exceeds 60%, the lender is obliged to notify the borrower about this, as well as about potential risks and liability measures, by signing the notification.
- The nominal interest rate on consumer credit is limited to no more than 0.08% per day.
