What is nominal interest rate and annual percentage rate (APR)?
How do the volatilities of exchange rates affect the loans in foreign currency?
What is the difference between annuity and differentiated payments?
What if I fail to repay the loan when due?
Can I repay the loan before the due date?
Can the interest rate change during the loan term?
What factors influence loan approval?
What factors influence loan rejection?
How long does it take to make a decision about my loan?
How long will the loan approval decision be valid?
Loan interest is calculated based on nominal interest rate. The latter shows the annual interest accrued on the outstanding loan. Interest accrues on daily basis to the outstanding loan principal in the loan currency based on a 365-day calendar year.
The annual percentage rate (APR) shows the cost of the loan in case of due and timely repayments under the agreement.
The annual percentage rate (APR) shows the cost of the loan in case of due and timely payment of interest, loan disbursement and service fees.
The amount of interest is calculated based on the annual nominal rate and manner of the loan repayment.
Exchange rate volatilities may affect the installments in case of loans in foreign currencies.
The annual percentage rate may change depending on the change of the interest rate published on the official website of the Central Bank of the Republic of Armenia.
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.
At the time of signing of a loan agreement, you may choose the form of repayment, i.e. whether you prefer making equal payments each months or would like to repay the principal in equal portions each time in which case the interest will decrease monthly.
There are two forms of repayment: annuity and differentiated payments.
- Annuity (equal payments). In this case the client makes equal monthly payments consisting of portion of loan and a portion of interest.
- Differentiated. In this case principal is repaid each time in equal portions and interest decreases with each payment and accrues on outstanding loan.
- Mixed. The client may choose an individual repayment schedule based on seasonality of cash flows, provided that at least 20% of contractual loan amount is repaid each year; interest is payable on monthly basis.
If you choose annuity, the total amount of payable interest will be higher than in the 2nd case. But in this case it is easier to plan the expenses, since the size of the installments is the same each month and you know exactly how much you are going to pay.
If you fail to repay your obligations when due or repay them partially, you will have to pay fines and penalties specified in the agreement. If you fail to pay the overdue obligations within 3 business days, the information about it will be reported to the Credit Bureau. It may affect your credit history and it will be difficult for you to get a loan in future.
Note, that once a year you may request information about your credit history from Credit Bureau for free.
When you repay your overdue debt, the payment will be made in the following order:
1. Fines and penalties
Yes, in case of consumer loan, car loan, line of credit and overdraft you have a right to repay the loan before the due date, irrespective of whether it is specified in the loan agreement or not. If your loan exceeds AMD 15 million and you repay it fully or partially during the first three years of the term, you will be required to pay a fine in the amount of 5% of the early repaid amount (not applicable to loans secured by cash/bonds).
The bank is entitled to change the interest rates depending on the developments in the financial market, volatility of the interest rates on the funds borrowed and/or allocated by the bank, and/or occurrence of preconditions for the change of annual interest rate applied to the loan.
In this case the bank must notify you about it at least 7 business days prior to such changes in the manner prescribed by the agreement. Such notification serves as a basis for applying the new interest rate from the date specified in the notification. If you do not consent to the new interest rate, you may terminate the respective agreement before the due date by repaying your obligations to the Bank under such agreement in full.
You have the right to terminate the loan agreement unilaterally for no particular reason, within 7 business days following its execution unless a longer period is specified therein (cooling-off period). This being the case, you will be required to pay the interest accrued at the annual percentage rate specified in the loan agreement. There are no other payments for termination of the loan agreement.
The following might be considered positive factors which can influence loan approval:
- Long-standing relationship between the bank and the client
- Business reputation
Your loan application might be rejected if:
- Presented information/documents/data appear to be non-trustworthy or incomplete
- Your income is insufficient
- You have a bad credit history, overdue and/or classified liabilities (including to third parties).
The bank makes a decision on pre-approval of the loan within 2 (two) days upon receiving your loan application. It will take up to 8 business days upon receiving the complete package of required documents for the final decision. You will be notified about it via Ameriabank’s website or the contact person within 1 business day after the decision is made.
The loan will be disbursed to you if the following conditions precedent have been met:
1. security agreements have been signed in accordance with the Armenian laws and regulations, such agreements prepared in form and substance satisfactory to the Bank
2. the collateral has been insured (upon the Bank’s request) by an insurance company cooperating with the Bank
3. the borrower has fulfilled other conditions of loan issuance.
Once the loan is approved by the bank, you may finalize the lending process by accepting the terms approved by the bank in 45 business days. Only then the loan will be formalized and disbursed.
Upon expiry of 45 (forty-five) calendar days after loan approval, the loan application will be subject to review again. You will be required to resubmit the necessary documents with a new term and the bank will make a new decision on the loan approval/rejection.
WHEN YOU APPLY FOR A LOAN, WE WILL PROVIDE YOU AN INDIVIDUAL LEAFLET DETAILING ALL ESSENTIAL TERMS OF YOUR CONSUMER LOAN.
THE LOAN INTEREST RATE MAY NOT EXCEED THE DOUBLE SETTLEMENT RATE DECLARED BY THE CENTRAL BANK OF ARMENIA.