Loan with a declining interest rate






Loan purpose Replenishment of working capital, capital investments, acquisition of fixed assets and repayment of accounts payable
Loan disbursement Non-cash, cash
Loan currency USD
Loan amount Up to USD 100 000
Loan maturity Up to 60 months
Initial minimum loan interest rate 13%, declining by 0.25% each year
Mode of interest accrual on the loan balance, accepting year as 360 days
Mode of principal and interest repayment Annuity - each month evenly repaid amount, which includes both the loan and the interest amount. Even amortization - even principal repayments each month, gradually reducing interest amounts calculated over the reducing loan balance.
Loan security Movable or immovable property
Loan processing fee to be charged from the loan amount In compliance with effective terms



Notification

  • In case of premature repayment of the loan, the repayment will be made in compliance with the effective terms and conditions. 
  • The collateral appraisal shall be made by independent licensed appraisal companies cooperating with the Bank at the rates set by appraisal companies. Please referhere for the list and rates of appraisal companies.
  • Loan decision shall be made in compliance with the effective terms within the period following the submission of loan application. 
  • After the authorized body has made a loan decision, the borrower shall be notified about it within one day. After the loan disbursement decision has been made, the maximum period required for the collection of documents and for the disbursement of loan shall be defined in compliance with the effective terms. If the loan is not disbursed within the mentioned period, the decision made by the authorized body shall be deemed as void and shall be submitted to the authorized body for a second consideration, in case the loan application is subject to review. 
  • In case the loan is disbursed in US dollars, changes in foreign currency exchange rate may influence the loan repayments. 
  • If the borrower fails to fulfill his/her obligations on timely basis, he/she shall pay penalties in the amount of 

 

a) 0.3% of the past due interest
b) 0.5% of the past due loan amount.

If the borrower has 10 (ten) and more past due days within 12 (twelve) months preceding the loan application, а loan processing fee shall be charged from the Borrower twice as much.

WARNING
IF THE BORROWER FAILS TO PERFORM LOAN OBLIGATIONS, THE COLLATERAL AND THE BORROWER’S OTHER PROPERTY (IF THE COLLATERAL HAS LOST ITS VALUE) MAY BE CONFISCATED AND REALIZED BOTH THROUGH DIRECT SALE AND PUBLIC AUCTIONS IN LEGAL OR OUT-OF COURT FORMS.

WARNING
IF THE BORROWER FAILS TO MAKE TIMELY INTEREST AND PRINCIPAL REPAYMENTS, THE BANK WILL HAVE TO REPORT THAT NEGATIVE INFORMATION TO THE CENTRAL BANK CREDIT REGISTER.

WARNING
IF THE BORROWER FAILS TO PERFORM OR DULY PERFORM LOAN OBLIGATIONS UNDER THE LOAN AGREEMENT, ALL LIABILITIES ASSUMED BY THE BORROWER SHALL BE DISCHARGED OUT OF THE PROCEEDS OF REPOSSESSING AND SELLING THE COLLATERAL THAT WAS PLEDGED AS LOAN SECURITY

The loan application will be approved if


1. the customer submits the complete package of documentation and the loan application.
2. after the loan application and the required documentation have been submitted, a query is made to the Central Bank credit register and/or ACRA credit bureau regarding the customer’s (co-borrowers’, guarantors’, as well as co-residing family members’, if available) credit history.
3. after the Bank discovers that the borrower has a positive credit history or no credit history at all, the Bank shall make an evaluation of the customer’s creditworthiness and solvency and site visit the applicant if necessary.
4. if the evaluation of creditworthiness shows positive results, the Bank proceeds to appraising the property offered as collateral.
5. if the appraised property offered as collateral is acceptable, an opinion shall be prepared and submitted to the authorized body for consideration.
6.after the loan has been approved, the parties shall execute all documents (including insurance against accidents of the borrower/co-borrower, the pledged collateral) as required by the RA legislation and other legal acts, and the loan shall be disbursed thereafter.

The loan application will be rejected if

1. the customer has failed to submit all documents necessary for getting the loan.
2. queries from the Central Bank Credit Register and/or ACRA credit bureau have revealed that the customer (or the co-borrowers, guarantors, as well as co-residing family members, if available) has a negative credit history. The credit history will be deemed as negative if the customer has or used to have past due payments, or loans that were classified in accordance with the “Regulation of Classification of Loans and Receivables and Formation of Reserves for Possible Losses of banks operating in Armenia” jointly approved by the Central Bank of Armenia and Ministry of Finance and Economy.
3. the evaluation of borrower’s creditworthiness has revealed that the borrower is not creditworthy.
4. the property offered as collateral is not acceptable for the Bank as discovered after the property appraisal.
5. the body authorized to make resolutions on loan applications within the Bank has not approved the application
6. the loan has been approved, but the applicant has failed to present himself/herself within 10 days after approval or has failed to present the necessary documents.
7. during the lending process the Bank has received information which prejudices the customer’s solvency.




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