For Individual Clients

Loan for renovation of commercial real estate


The purpose of this loan is renovation of commercial real estate for commercial, lease or investment purposes, or transfer of a loan for renovation of real estate for commercial, lease or investment purposes from another bank/credit organization to Ameriabank. 

 


Loan for renovation of commercial real estate 

Eligible age of client/co-borrower/guarantor

18-65 provided that the age of the borrower on the date of the loan agreement expiry does not exceed 65, otherwise a co-borrower or guarantor meeting the age criteria is required

Residency

Citizens and non-citizens of Armenia who are resident in Armenia

Currency

AMD

USD

EUR

Minimum and maximum loan limit

AMD 3,000,000 - AMD 150,000,000

USD 5,000 - USD 300,000

EUR 5,000 - EUR 300,000

Loans are disbursed by installments. Each disbursement is subject to proper use of previous disbursement for its intended purpose by the borrower, except where the amount of loan is AMD 7 million or less or the loan has been transferred from another bank, in which cases the sum is disbursed lump sum.

Term (months)

36-60

Standard annual interest rate1

Adjustable2 (rate can be changed starting from the 13th month)

Fixed

Adjustable2 (rate can be changed starting from the 13th month)

Fixed

Adjustable2 (rate can be changed starting from the 13th month)

Fixed

Fixed component 4.5% + variable component (base rate)

13.0%

Fixed component 7.5% + variable component (base rate)

10.0%

Fixed component 6.5% + variable component (base rate)

8%

Annual percentage rate¹

Adjustable2 (rate can be changed starting from the 13th month)

Fixed

Adjustable2 (rate can be changed starting from the 13th month)

Fixed

Adjustable2 (rate can be changed starting from the 13th month)

Fixed

13.53%-16.04%

11.31%-14.25%

10.22%-13.9%

9.13%-12.74%

8.54%-11.59%

7.47%-10.46%

Term (months)

61-120

Standard annual interest rate1

Adjustable2 (rate can be changed starting from the 37th month)

Adjustable2 (rate can be changed starting from the 37th month)

Fixed

Adjustable2 (rate can be changed starting from the 37th month)

Fixed

Fixed component 4.75% + variable component (base rate)

Fixed component 7.75% + variable component (base rate)

10.25%

Fixed component 6.75% + variable component (base rate)

8.25%

Annual percentage rate¹

Adjustable2 (rate can be changed starting from the 37th month)

Adjustable2 (rate can be changed starting from the 37th month)

Fixed

Adjustable2 (rate can be changed starting from the 37th month)

Fixed

11.46%-13.09%

10.36%-12.39%

9.27%-11.24%

8.7%-10.36%

7.63%-9.23%

Term (months)

121-240

Standard annual interest rate1

Adjustable2 (rate can be changed starting from the 37th month)

Adjustable2 (rate can be changed starting from the 37th month)

Adjustable2 (rate can be changed starting from the 37th month)

Fixed component 5.0% + variable component (base rate)

Fixed component 8.0% + variable component (base rate)

Fixed component 7.0% + variable component (base rate)

Annual percentage rate¹

Adjustable2 (rate can be changed starting from the 37th month)

Adjustable2 (rate can be changed starting from the 37th month)

Adjustable2 (rate can be changed starting from the 37th month)

11.67%-12.7%

9.47%-10.66%

7.84%-8.78%

Other terms related to the interest rate

If repayment schedule is differentiated or mixed, the applicable interest rate is increased by 0.5%.

If loan-to-value ratio differs from the approved standard, 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 client prefers a lending scheme without early repayment fee, the applicable interest rate is increased by +2% (not applicable to loans secured by cash or bonds).

Where insurance is obtained by client, the interest rate is decreased by 0.05%.

Loan disbursement lump-sum fee

0.5% of the loan principal or AMD 50,000, whichever is greater

Form of disbursement

Credit to the account

Loan formalization venue

Bank

Repayment frequency

Monthly

Repayment

Annuity (equal payments),
Differentiated (non-equal payments),
Mixed

Eligible security

1. The loan is secured by the property being renovated. The bank may consider as additional security pledge of other real estate to the reasonable satisfaction of the bank, as well as cash in Ameriabank or bonds issued by Ameriabank.
2. If the borrower wishes to renovate property under construction without registered certificate of title, the loan will be secured by other Armenia-based real estate to the reasonable satisfaction of the Bank.

Loan-to-value (LTV) ratio

Maximum loan amount is 100% of the lower of the two: appraised liquidation value or purchase price of pledged property; or 100% of pledged cash in Ameriabank or bonds issued by Ameriabank.

Location of real estate to be pledged

Capital cities and regional centers of Armenia and Artsakh, as well as the towns of Abovyan, Ejmiatsin, Jrvezh, Arinj, Dzoraghbyur, Tsaghkadzor, Dilijan, Qajaran and Jermuk

Additional security

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

Term of fulfillment of conditions of loan

6 months after disbursement of the last loan installment, unless otherwise determined by the relevant authority of the Bank

Early repayment fee

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

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

1. Depending on the creditworthiness of the borrower and LTV ratio, a higher or lower interest rate can be applied. 

2. Variable component (base rate)

3. Attention. The adjustable nominal interest rate may be revised no more than twice a year.

 

 

Collateral appraisal

 

The real estate 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. On a case-by-case basis, the fee for appraisal of major items of property may be negotiable. The list of appraisal companies cooperating with the Bank may be found at the link below.

 

 

 

Insurance of pledged property

 

Insurance for the pledged property to be obtained on an annual basis throughout the loan term:

  • By the bank to the extent of outstanding loan 
  • By the client at least to the extent of outstanding loan

 

The Bank doesn’t obtain insurance for the following vehicles:

  • Vehicles transporting hazardous materials (toxic substances, chemicals, radioactive and explosive  materials) 
  • Vehicles to be used in races, test drives; vehicles which have three wheels, snow removers, motorcycles, special purpose vehicles
  • Taxis and rental cars
 
 
 
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
  • Certificate of the right to purchase real estate and registration of the security interest: AMD 3,000 and AMD 50,000
  • Certificate of acquisition of the title to the real estate and registration of the security interest: AMD 21,000 and AMD 50,000
  • Certificate of acquisition of the title to the commercial real estate and registration of the security interest: AMD 41,000 (if the area of the premises to be purchased and pledged is above 200 sq. m) and AMD 50,000
  • 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]
  • Certificate of title to real estate to be pledged [original]
  • Geodetic measurement report of land plot to be pledged**
  • Initial real estate appraisal report
  • Construction costs estimate
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)
  • Real estate appraisal report (final)
  • Other documents as the bank's specialist may request
 
 
Loan service fees
 
Loan service fees, including fees for modification of the loan terms and substitution of the collateral, are presented at the link below.
 
 

 

 

 

 

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!

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!

IF YOU FAIL TO PERFORM YOUR OBLIGATIONS IN A PROPER MANNER, THE LENDER WILL REPORT INFORMATION ABOUT YOUR OVERDUE OBLIGATIONS WITHIN 1-3 BUSINESS DAYS TO THE CREDIT BUREAU WHERE YOUR CREDIT HISTORY IS GENERATED. YOU ARE ENTITLED TO OBTAIN YOUR CREDIT HISTORY FROM THE CREDIT BUREAU ONCE A YEAR, AT NO COST. ATTENTION. BAD CREDIT HISTORY MAY AFFECT YOUR FUTURE ATTEMPTS TO GET A LOAN.

 

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

  • Fines and penalties     
  • Interest    
  • Principal
 

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.

 
Attention!
In case of loans in foreign currency, any change of the exchange rates may affect loan payments, while the annual percentage rate may change depending on the exchange rate published by the Central Bank of Armenia on its official page. 
 
Definition of the annual percentage rate is based on the exchange rate published on the official website of the Central Bank of Armenia on the day of the agreement execution or the preceding business day. 
 
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 REGISTRY WITHIN 3 BUSINESS DAYS.

YOUR BAD CREDIT HISTORY MAY AFFECT YOUR FUTURE LOAN APPLICATIONS.

 

 

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.

 

 

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, 12:02

Services for Individuals

  
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