The loan is offered at Artashat, Masis, Abovyan, Ashtarak, Vanadzor, Spitak, Armavir, Etchmiadzin, Sevan, Dilijan, Ijevan, Martuni, Shirak, Gyumri, and Gyumri 2 branches of the Bank.

* For vehicles used as collateral, annual mandatory insurance is required, equivalent to the outstanding loan balance.

**For loans provided with a flexible repayment schedule, a grace period of up to 6 months may be established for the entire loan term, during which only accrued interest payments shall be payable.

The collateral must be appraised by an independent appraisal firm cooperating with the Bank and be acceptable to the Bank.

Please find here the list of the Bank’s partner insurance companies and the applicable tariff rates.

Attention: Loan interest is calculated based on nominal interest rate, with the effective annual interest rate reflecting the total cost of loan upon full and timely payment of interest and all mandatory loan processing and servicing fees.

The nominal interest rate of the loan may be subject to change by the financial institution.

Mandatory Fees

Fees for provision of statements, references and other data

Fees for services provided in the course of credit operations

Please note that the scores generated by your loan applications and the number of your credit history inquiries may affect your total credit score.

Loans provided to support the development of intensive horticulture, the introduction of modern technologies, and the promotion of the production of traditional high-value crops:

Loans provided for the procurement of agricultural raw materials:

*The annual interest rate will be subsidized at a level that allows loans to be issued at a final annual rate of 0-5%, depending on the borrower’s place of operation, the purpose of the loan, and other conditions approved by the RA Government, excluding sub-loans provided under the credit programs administered by the “German-Armenian Fund” PMU established by the Central Bank of Armenia.

** The effective interest rates are calculated for loans classified as consumer credit under the Law of the Republic of Armenia “On Consumer Crediting.”

DOCUMENTS REQUIRED FOR FINANCIAL ANALYSIS

1. Loan application form
2. Copies of passport and social security card
3. Copies of documents certifying ownership or lease rights to the place of business activity (if applicable)
4. Internal financial statements or declarations (if applicable)
5. Information on the borrower’s additional sources of income, along with supporting documentation (if required)
6. Certificate of actual residence indicating household members (if required)
7. Employment confirmation letter for the borrower or their family members (if required)

DOCUMENTS REQUIRED FOR LOANS SECURED BY GUARANTEE

1. Copies of the guarantors’ passports and social security cards
2. Employment confirmation letter, if the guarantor’s income is not derived from entrepreneurial (agricultural) activities and/or the guarantor is not a family member.

DOCUMENTS REQUIRED FOR LOANS SECURED BY REAL ESTATE

1. Certificate of ownership (original)
2. Title document certifying ownership rights (upon the Bank’s request)
3. Copies of identification documents of the owner (co-owners), including marriage certificate(s)
4. Certificate from the Territorial Division of the RA State Unified Real Estate Cadastre regarding any encumbrances on the pledged property (to be submitted upon a positive loan approval decision)
5. Property appraisal report prepared by a duly licensed appraiser

DOCUMENTS REQUIRED FOR LOANS SECURED BY OTHER PROPERTY  

1. List of assets, specifying the unit of measurement, quantity, book value, and, where available, supporting acquisition documents
2. For vehicles: technical passport and certificate of ownership (original)
3. In case of a guarantee: passports and social security cards of guarantors (the Bank may request additional documents if necessary)
4. Appraisal report prepared by a duly licensed appraiser upon the Bank’s request

 DOCUMENTS REQUIRED FROM REPEAT BORROWERS

UNDER THE MASTER LOAN AGREEMENT

1. Loan application form
2. Additional supporting documents, if required.

• A lending decision is made within a maximum of 5 business days.
• The borrower is notified of the lending decision within 1 business day.
• Upon approval, the required documents must be collected and the loan disbursed within a maximum of 15 days.

Order of loan repayments:

• Court-related and other debt recovery expenses (where applicable)
• Accrued penalties and fines (where applicable)
• Accrued interest
• Principal amount of the loan

Borrower Credit History Requirements

• During the 12 months preceding the loan application date, the borrower must not have had overdue credit obligations exceeding 30 cumulative days.

Borrower Tax Liability Requirements

• As of the date of application, no administrative proceedings for the collection of outstanding tax liabilities must have been initiated during the preceding 365 days, or the overdue tax liabilities outstanding as of December 31, 2019, must not have exceeded 1% of the total balance of the Unified Treasury Account.

The criteria for approval or rejection of a loan application are defined by the Bank’s internal policies governing the lending process.

Your property (house, vehicle, or other) may be confiscated in the manner provided for by law where you fail to repay your interests and principal in time.

Where you fail to perform your obligations either fully or partially, the Lender shall send those data to the credit bureau within a three-day period, where your credit history is generated. You shall have the right to obtain your credit history from the bureau free of charge. Attention: A bad credit history may hinder lending in the future. 

You have the right to communicate with a financial institution of your choice by post or e-mail. Receiving information electronically is the most convenient option. It is available 24/7, free from the risks of loss of paper information and ensures privacy.

The bank may request additional documents or other information based on the "Know your customer" principle, as well as ask additional questions during oral communication, for the purpose of due diligence of the customer defined by the RA Law "On Combating Money Laundering and Terrorist Financing". 

In accordance with the agreement signed with the USA based on the Compliance Act (FATCA), the financial organization may collect additional information to determine whether you are a US taxpayer.

Your property (house, car, etc.) may be legally repossessed if you fail to make timely payments of interest and principal on your loan.

Where the borrower fails to perform his/her obligations, either partially or in full, the lender shall report the outstanding loan information within a 3-day period to the Credit Bureau, where the borrower’s credit history is generated. The borrower shall have the right to obtain his/her credit history from the Bureau once a year for free. Please note that a bad credit history may hinder lending in the future. 

You have the right to communicate with the financial institution by any convenient way - by post or e-mail. Receiving information electronically is the most convenient option. It is available 24/7, is free from the risks of loss of paper information and ensures privacy.

“Your financial directory” is an electronic system which facilitates the search, comparison and selection of the best options in the services offered to natural persons.

The Bank, for the purposes of conducting customer due diligence as required by the RA Law “On Combating Money Laundering and Terrorism Financing,” may, based on the “Know Your Customer” (KYC) standards, request additional documents or information, as well as ask supplementary questions during verbal communication.

In accordance with the agreement signed with the USA under the Compliance Act (FATCA), the Bank may collect additional information to determine if you are a US taxpayer.

Information on credit history and credit score

What is a credit history?

The RA Law "On Circulation of Credit Information and Activities of Credit Bureaus" defines credit information as data on liabilities, payments and habits of credit information entity used by financial institutions when assessing customer creditworthiness, as well as by manufacturers, vendors and service providers when selling goods/services on installment.

Why credit history matters

Customer credit history plays a critical role in assessing customer creditworthiness and making informed credit decisions. A credit report - obtained via customer consent - provides a comprehensive snapshot of a customer’s credit behavior, including current and repaid liabilities, payments, and guarantees. A positive credit history can be generated through timely payments and intentional and responsible use. A credit report is a paper or electronic document that contains information on the credit information entity (natural or legal) and the fulfillment of its financial liabilities to business entities.

The credit report is compiled based on data received from ACRA partner organizations and reflects credit data for the last 5 years preceding the date of the inquiry.

Types of score

To assess customer creditworthiness before extending certain types of loans, AraratBank uses its own scoring system. A credit score is a numerical assessment of customer creditworthiness based on an analysis of their credit history, income, solvency, and other data.

FICO Score is a numerical assessment of customer creditworthiness based on an analysis and statistical study of their credit history.

Requests for new credit or increases to existing credit limits can reduce a FICO score.

The Bank’s in-house scoring mechanism is based on the following data categories:

1. Credit history and debt burden,
2. Income,
3. Workplace and work experience,
4. Other factors.

Purpose of inquiry

Consent to conduct inquiries is mandatory for reviewing a loan application and for analyzing (monitoring) existing loans and other financing agreements. When the Bank presents offers to the customer, such inquiries are carried out only if the customer has provided their consent.

How long does information stay on my credit report?

According to the provisions of Article 11 of the RA Law ”On Circulation of Credit Information and Activities of Credit Bureaus”, credit reports issued by credit bureaus must not include credit data older than five years from the date of issuance.

How can I improve my credit history?

You can improve your credit history by repaying existing loans according to the scheduled timeline, by reducing the number of existing loans through their partial or complete repayment, as well as by ensuring timely fulfillment of obligations assumed under guarantees.

How do I dispute an error on my credit report?

According to the provisions of the Article 20 of the RA Law ”On Circulation of Credit Information and Activities of Credit Bureaus”, you may correct inaccurate or incomplete data in your credit history by submitting a notification to the credit bureau or applying directly to the company that provided the information (credit information source). The credit bureau may be notified either in written or electronic form via My ACRA personal portal. The Dispute Resolution Procedure of “ACRA Credit Reporting” CJSC defines the specific sequence for receiving, examining, and responding to client complaints regarding credit reports.

For more details, visit the following links:

• abcfinance.am
• FAQ - ACRA (acra.am)
• FICO Score - acra.am