For Individual Clients

Consumer Loans Secured by Property


Consumer loans are used to cover consumer expenditures of an individual or a family. Consumer loans are issued to citizens and non-citizens of Armenia who are resident in Armenia.

 

 

Consumer loans secured by assets (including paper gold and cash)

Who may apply

Citizens and non-citizens of Armenia who are resident in Armenia and are aged 18-65

Loan purpose

Personal/family/consumer expenses

Currency

AMD

Form of disbursement

Credit to the account

Loan Amount

AMD 3 million* - AMD 50 million

* The minimum threshold is not applicable to loans secured by deposits, gold and metal accounts.

Loan term

60 months

Repayment

Annuity (equal payments)

Differentiated (non-equal payments) (+0.5%),

Mixed (+0.5%)

 

 

 

Annual interest rate [1]    

 

 

 

 

 

36 months

15 %

Fixed

37-60 months

16%

  • Fixed
  • Adjustable (rate can be changed starting from the 13th month)

61-120 (only for loans secured by real estate)

Fixed component: 8.0% + Base rate (variable component)

Adjustable (rate can be changed starting from the 37th month)

Attention!

The adjustable nominal interest rate may be revised no more than twice a year. Furthermore, depending on the change of the adjustable nominal interest rate, the threshold above or below which the nominal rate cannot change is ±4%.

Effective rate

16.5-19.6%

Loan provision lump-sum fee

0.5% of loan amount or AMD 50,000, whichever is greater (Not applicable to loans secured by cash, bonds issued by Ameriabank or metal accounts)

Repayment frequency

Monthly

Guarantee

Guarantors’ documented income should comprise at least 50% of the borrower's income, and their credit history should meet the criteria set by the Bank.

Late payment fines and penalties

The interest rate specified in the loan agreement shall continue to be applied to overdue loans. Fine in the amount of 0.13 % of overdue loan/interest for each day of delay

Loan formalization venue

Bank

Eligible security [2] 

Real estate, vehicles, plant and equipment to the reasonable satisfaction of the bank, metal accounts in gold, cash and bonds issued by Ameriabank

Maximum loan-to-value (LTV) ratio (if the loan is secured by real estate, vehicles or plant and equipment, calculation is based on their liquidation value)

The value of the loan security shall be included in the estimation of the LTV ratio in an amount not more than:

1. Real estate: 70% if in Yerevan, 60% if outside Yerevan

2. Vehicles: 60%

3. Property and equipment: 40%, but not more than 30% of the value of aggregate pledge

4. Metal accounts in gold with Ameriabank: 80%

5. Cash collateral/bonds issued by Ameriabank:

- 90% if currency of the collateral is the same as of the loan

- 70% if currencies of the collateral and the loan are different

Property appraisal

Pledged assets to be appraised by an appraising partner of the bank.

Additional security

The Bank may request guarantee of individuals and/or companies as additional security.

Insurance of property

The insurance of real estate, vehicles and plant and equipment is maintained throughout the loan term:

1. If obtained by client: to the extent of at least outstanding principal

2. If obtained by the bank: to the extent of outstanding principal

Other fees payable by client

• Fee for unified statement issued by the State Committee of Real Estate Cadaster of the Republic of Armenia

• Fee for notarization of pledged assets/vehicle and filing of the bank’s security interest under pledge agreement

• Fee for statement from the Police on encumbrance of vehicle

Early repayment

5% of prepaid amount, chargeable if early repayment of the whole or part of loan is made during the first 3 years of loan term. Applicable to loans exceeding AMD 15 million where the credit limit has been prepaid in full. Not applicable to loans secured by cash or bonds.

 

[1] 

  • If at the Client's request the pledge is insured by the Bank, the interest rate shall be increased by the premium set by the Bank.

                - Vehicles: 2.5%

                - Fixed assets: 0.5%

  • Where the insurance of real estate is obtained by the client, the interest rate is reduced by 0.05%, based on the share of each type of assets in the total collateral.
  • If loan-to-value ratio differs from approved standard, the applicable interest rate is increased by 0.5%.
  • If repayment schedule is differentiated or mixed, the applicable interest rate is increased by 0.5%.
  • Depending on credit history, the applicable interest rate can be increased by 0.5%.
  • If the loan is secured by cash or bonds issued by Ameriabank, the interest rate is: 

                - % of deposit/bond + 4%, but in any case not more than the rates specified above, if the loan and the collateral are in the same currency 

                - Rates specified above, if the loan and the collateral are in different currencies

  • Where the client chooses a repayment option without early repayment fee for loans exceeding AMD 15 million, the interest rate is increased by 2% (not applicable to loans secured by cash/bonds).

 

[2] Location of the real estate to be pledged: Capital cities and regional centers of Armenia and Artsakh, as well as the towns of Abovyan, Etchmiadzin, Jrvezh, Arinj, Dzoraghbyur, Tsaghkadzor, Dilijan, Qajaran and Jermuk.

Age of vehicles to be pledged is max 12 years for foreign brand vehicles other than vehicles made in Russia, China and Iran, in which case max age is 8 years.

 

 

The real estate or movable property to be pledged should be appraised by an appraisal company cooperating with the Bank. The company is selected by the client from the offered list. Appraisal fee: AMD 13,000-30,000* depending on the property.

 

In addition, the client will pay for the following services:
  • Notary fee: AMD 14,000-16,000 lump-sum (in case of vehicles)
  • Notary fee: AMD 13,000-18,000 lump-sum (in case of real estate)
  • Fee for unified statement from the State Real Estate Cadaster on encumbrance of the property: AMD 10,000
  • Fee for registration of security interest in the real estate: AMD 26,000
  • Fee of the Police of the Republic of Armenia (for lien and pledge of movable property): AMD 5,000 lump sum
 
 
 

Required documents

 

Required documents filed together with loan application

  • Loan application
  • ID (original)
  • Certificate of ownership of property to be purchased/pledged (copy)

Documents required after initial approval

 

  • Proof of employment and/or other income
  • Marriage (divorce, spouse death), birth certificate (original)
  • Certificates of registration and ownership certificates of vehicles to be pledged (original)
  • Certificate of title to real estate to be pledged (original)
  • Geodetic measurement report of land plot to be pledged**
  • Initial report on appraisal of real estate/vehicle
  • Other documents as the bank's specialist may request

Documents required after loan approval

  • Copies of bases of title to real estate (to be submitted upon request)
  • IDs of owners of property to be purchased/pledged (originals)
  • Copies of marriage (divorce, spouse death) certificates of owners of property to be pledged
  • Statement from the State Committee of Real Estate Cadaster on encumbrance of real estate (unified statement)
  • Statement, issued by the Police, on encumbrance of vehicle
  • Real estate appraisal report (final)
  • Real estate/vehicle insurance policy
  • Other documents as the bank's specialist may request

 

 

Loan service fees

 

Purpose

AMD

Modification of the loan terms

15,000

Change of the loan repayment date

5,000

Substitution of pledged property (for real estate; including change of the property owner)   

10,000

Substitution of pledged property (for vehicles; including change of the owner of the pledged vehicles)  

5,000

Provision of pledge-related consents, permissions and references  

5,000 (VAT included)

 

The fee is charged if the modification is requested by client. Where there are several applicable fees for the same modification, the highest fee is charged and only once. Fees are not applicable in case of loans secured by cash, bonds and metal accounts. If the modification implies adding new pledge or involving a new guarantor, no fee is charged.

 

 

 

 

 

Information for the Guarantor

 

Before execution of the agreement the creditor provides to the borrower an Individual Leaflet. 

If the Borrower fails to meet his/her loan obligations in a proper manner, the guarantor will take on responsibility of the debt and will have to repay the outstanding loan. 

The guarantor is entitled to receive reimbursement from the borrower for the repaid debt, i.e. the guarantor may request the borrower to reimburse the amount paid to the lender, the interest and other expenses incurred as a result of taking responsibility instead of the borrower.

The lender must warn the guarantor in advance about pending loan repayment, i.e., if the borrower fails to meet his/her obligations in due manner, the guarantor is required to repay the outstanding debt within the period defined in the guarantee agreement after getting the respective notice from the lender.

The guarantor’s name may appear in the BAD BORROWER LIST, i.e., if the borrower doesn’t repay his/her obligations, the guarantor’s name may be reported to the Credit Bureau, where the credit history is originated. This may affect the guarantor’s future loan applications.

 

 

Statements

 

We will provide you the statements of your credit accounts through communication channels and at frequency agreed between you and us and/or in accordance with the Armenian laws and regulations. The statements are provided by post, email, Internet-Bank or in person at any branch of the Bank. 

 

Provision of statements, information and copies of documents 

Service

Provision of account statements, copies of account statements or other documents kept in electronic form, backdated up to 1 year

Free

Provision of account statements or copies of account statements backdated more than 1 year or other documents kept in electronic form7

AMD 5,000 per annual statement per account, VAT included

Provision of copies of documents kept in paper or backdated more than 1 year and kept in electronic form

AMD 5,000 per document, VAT included

Provision of references

 

To holders of 3+ months old accounts6

AMD 3,000, VAT included

To holders of less than 3 months old accounts

AMD 5,000, VAT included6

 

 

Attention!

WHEN YOU APPLY FOR A LOAN, WE WILL PROVIDE YOU AN INDIVIDUAL LEAFLET DETAILING ALL ESSENTIAL TERMS OF YOUR CONSUMER LOAN.

 

Attention!

THE LOAN INTEREST RATE MAY NOT EXCEED THE DOUBLE OF THE BANK RATE DECLARED BY THE CENTRAL BANK OF ARMENIA.

 

Attention!

THE PLEDGED PROPERTY MAY BE FORECLOSED IF THE BORROWER FAILS TO REPAY LOAN AMOUNT AND INTEREST IN TIME. IF THE VALUE OF THE COLLATERAL IS INSUFFICIENT, OTHER PROPERTY OF THE BORROWER WILL BE ENFORCED TO REPAY THE BORROWER’S OBLIGATIONS.

 

Attention!

LOAN INTEREST IS CALCULATED AT THE NOMINAL INTEREST RATE. THE LATTER SHOWS THE ANNUAL INTEREST ON THE LOAN CALCULATED AS A PERCENTAGE OF THE OUTSTANDING LOAN BALANCE. THE LOAN INTEREST IS ACCRUED TO THE OUTSTANDING LOAN PRINCIPAL IN THE LOAN CURRENCY DAILY, BASED ON A 365-DAY CALENDAR YEAR. 

 

THE ANNUAL PERCENTAGE RATE SHOWS THE COST OF THE LOAN IN CASE OF DUE AND TIMELY REPAYMENTS UNDER THE AGREEMENT.

 

The amount of interest is calculated based on the annual nominal rate and manner of the loan repayment.

 

 

The loan may be repaid in the following manner:

 

  • In case of differentiated repayment (equal portions of principal each month) the client repays equal portions of loan principal, but the amount of interest is different each month. This being the case, the amount of total monthly payment decreases each month.
  • Annuity (equal payments). In this case the client makes equal payments (consisting of portion of the loan principal and some interest) each month throughout the loan term.
  • Mixed. The client has an opportunity to select individual repayment plan matching his/her preferences, based on the seasonality of the client’s financial flows, provided that the principal amount being repaid each year is equal to at least 5% of the contractual loan amount in case of loans for purchase, renovation and construction of residential and commercial real estate, as well as investment loans.

 

If you choose the 2nd method to repay the loan, the total amount of payable interest will be higher than in the 1st case. 

 

The 2nd method, however, allows you planning your expenses, because you know the exact amount you’re going to pay each month, and the amounts payable during the first months are overall smaller. 

 

More detailed information on the interest calculation procedure is presented here.

 

Attention!

IF YOU FAIL TO PERFORM YOUR PAYMENT OBLIGATIONS WHEN DUE OR DO NOT PERFORM THEM PROPERLY, OVERDUE AMOUNTS SHALL BEAR FINES AND PENALTIES AS DEFINED BY AGREEMENT, AND THE INFORMATION ABOUT YOUR OVERDUE LIABILITIES WILL BE REPORTED TO CREDIT BUREAU WITHIN 3 BUSINESS DAYS. YOU ARE ENTITLED TO OBTAIN YOUR CREDIT HISTORY FROM THE CREDIT BUREAU ONCE A YEAR, AT NO COST.

 

When you repay your overdue debt, the payment will be made in the following order:

  1. Fines and penalties  
  2. Interest  
  3. Principal

YOUR BAD CREDIT HISTORY MAY AFFECT YOUR FUTURE LOAN APPLICATIONS.

 

 

Early repayment 

 

In case of consumer loans, car loans, line of credit or overdraft the client has the right to repay the liabilities before the due date irrespective of whether or not such provision is included in the loan agreement.

 

 

Change of interest rates

 

The Bank is entitled to change the interest rates depending on the volatility of the interest rates on the funds borrowed and/or allocated by the Bank in the financial market, and/or occurrence of preconditions for the change of annual interest rate applied to the loan. The Bank shall inform the borrower of any change in the nominal interest rate made at the sole discretion of the Bank in advance, within the term specified in the agreement (at least 7 days in advance), via the channels specified in the agreement, which shall serve as a basis for applying the new terms from the date specified in the notice. If not consenting to the new interest rate, the borrower may terminate the respective agreement before the maturity date, repaying the liabilities to the Bank under such agreement in full.

Consumers are allowed to cancel the credit agreement at their own discretion, for no particular reason, within 7 business days following its execution unless a shorter period is stipulated therein (cooling-off period). In such cases, consumers are required to pay the interest accrued at the annual percentage rate under the credit agreement. The consumer will not be required to pay any other reimbursement in relation to the cancellation of the credit agreement.

 

 

What may help you to get your loan approved

 

  • Long-standing relationship between the Bank and the client
  • Business reputation
  • Other 

 

 

Why your loan might be rejected

 

  • The information (documents and other data) provided by the borrower is not trustworthy or complete.
  • The borrower's declared income is not sufficient to cover the liabilities.
  • The borrower has bad credit history, delinquent and/or classified liabilities (including to third parties).
  • Other 

 

 

Loan decision

 

The Bank reviews the loan application and makes a preliminary decision within 2 business days. If approved, the final loan decision is made within no more than 8 (eight) business days upon receipt of the complete set of documents. The Bank's decision is communicated to the client within 1 (one) business day. The loan is issued to the borrower only after execution of security agreements specified in the agreement. 

 

The loan will be disbursed to the borrower if the following conditions precedent have been met:

 

  • security agreements have been signed in accordance with the Armenian laws and regulations, such agreements prepared in form and substance satisfactory to the Bank,  
  • the collateral has been insured (upon the Bank’s request) by an insurance company cooperating with the Bank,  
  • the borrower has fulfilled other conditions of loan issuance. 

 

Once the Bank makes a loan decision, if the client:

 
  • Confirms his/her intention to receive the loan within 45 (forty-five) calendar days upon getting loan approval notice, the loan processing and issuance process starts. 
  • Confirms his/her intention to receive the loan after 45 (forty-five) calendar days upon getting loan approval notice, the loan decision is subject to re-approval. 
 


 


Updated 24.02.2020, 13:33

Services for Individuals

  
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