For Individual Clients

Consumer Loans Not 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 Not Secured by Property

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 150,000 - AMD 10,000,000

Loan term

60 months

Repayment

Annuity (equal payments)

Differentiated (non-equal payments)

Mixed

Annual interest rate

20%

  • 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%.

Effective rate

22.2-23.9%

If the application is reviewed online or according to the terms and conditions of lending defined for employees of respective industries of economy other terms may apply, such as

Nominal interest rate: 14% - 21%

Effective rate: 14.81 - 23.15%

Loan disbursement fee: 1% of the loan amount, maximum AMD 10,000 (the fee is applied only if application is submitted to the bank’s branches)

Loan disbursement fee*

  • AMD 5,000 if the loan amount is within AMD 1 million
  • 0.5% of loan amount or minimum AMD 20,000 if the loan amount is equal to or above AMD 1 million)

* Not applicable to online applications

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

Fine in the amount of 0.13 % of overdue loan/interest for each day of delay

The interest rate specified in the loan agreement shall continue to be applied to overdue loans.

Loan formalization venue

Bank

 

 

 

Loan service fees

 

Purpose

AMD

Modification of the loan terms

15,000

Change of the loan repayment date

5,000

 

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.

 

 

Required documents

 

Required documents filed together with loan application

  • Loan application
  • ID (original)

Documents required after initial approval

  • Proof of employment and/or other income
  • Other documents as the bank's specialist may request
 

 

 

 

Information for the Guarantor

 

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!

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 disbursed within 1 (one) business day after fulfillment of the lending conditions by the borrower.  

 

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 31.01.2020, 16:54

Services for Individuals

  
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