Everything you need to know about loans in Ukraine

A loan is when one party (the lender) transfers money or other items defined by generic characteristics to another party (the borrower), and the borrower undertakes to return the same amount of money or an equal quantity of items of the same type and quality (Article 1046 of the Civil Code of Ukraine).

How to apply for a loan

1. Verbal
   If the amount is small (less than UAH 170 or between individuals without disputes), the loan may be concluded verbally. However, it will be difficult to prove its existence in the event of a conflict..
   
2. In writing
   • If the amount exceeds UAH 170 (10 non-taxable minimum incomes) or if the lender is a legal entity, a written form is required..
     
   • A written agreement may be in the form of a receipt or a full-fledged contract..
     
3. Notarization
   It is not mandatory, but significantly strengthens the protection of the lender’s rights. A notarized receipt or agreement allows you to quickly collect the debt through an enforcement order..
   

Interest on the loan

• As a general rule, a loan is considered to be interest-bearing (Article 1048 of the Civil Code of Ukraine).
• The exception is if it is expressly stated that the loan is interest-free, or if the borrower has received items defined by generic characteristics (e.g., grain).
• The interest rate may be specified in the agreement. If not, the NBU discount rate is used.

Return period

• If the term is not specified, the borrower must repay the amount within 30 days of the lender’s request (Article 1049 of the Civil Code of Ukraine).
• If the term is specified, the money/items must be returned within that period.

Responsibility for late return

• Interest is charged for late payment for the use of someone else’s money (Article 625 of the Civil Code of Ukraine).
• If there is a written agreement or receipt, the lender has the right to apply to a court or notary to collect the debt.

Common myths

• “A receipt is worthless.” In fact, it is valid evidence in court.
• “If the deadline is not specified, you don’t have to pay.” No, the law establishes a 30-day period after the demand.
• “No interest — always.” Unless otherwise specified, the NBU interest rate applies.

International practice

In many countries, loans are always formalized in writing, even between individuals. This protects both the lender and the borrower. In Ukraine, it is also advisable to adhere to the written form—it greatly simplifies the protection of rights.