The credit line is provided at full-service branches of the Bank.

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.

How to Calculate Effective Annual Interest Rate

Nominal interest rate of the credit line is calculated based on the amount of funds actually drawn, in accordance with the loan agreement. 

Interest is accrued daily (except for overdrafts with grace period), and no minimum account balance is required.

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.

• • Application
  • Applicant’s passport and social card (or, if unavailable, a certificate issued by the relevant authority)
  • Appraisal report prepared by a licensed professional
  • Other documents as requested by the loan officer

• • • A lending decision is made within 1 business day.
    • The borrower is notified of the lending decision within 1 business day.
    • The loan is disbursed within 1 business day from the date of submission of required documents.

     

     

    Grounds for loan approval

     

    1. The Borrower has submitted all required documents in full.
    2. Following the submission of the loan application and all necessary documents, a credit inquiry conducted through the ACRA Credit Bureau indicates that, in the 24 months preceding the application, the customer has had no overdue or classified obligations (excluding settled guarantees), or the total number of days past due has not exceeded 45 days, and in the last 12 months has not exceeded 30 days, with existing loan obligations maintaining a standard credit risk rating.
    3. In cases of a positive credit history or absence of a credit history, the customer’s creditworthiness has been assessed as positive.
    4. Other criteria.

     

    Grounds for loan rejection

     

    1. The Borrower has failed to submit all required documents.
    2. Following the submission of the loan application and all necessary documents, a credit inquiry conducted through the ACRA Credit Bureau indicates that, in the 24 months preceding the application, the customer has had overdue or classified obligations (excluding settled guarantees), or the total number of days past due has exceeded 45 days, and in the last 12 months has exceeded 30 days.
    3. In cases of a positive credit history or absence of a credit history, the customer’s creditworthiness assessment has resulted in a negative conclusion.
    4. Information on the customer obtained in the course of the lending process undermines the customer’s solvency.
    5. The customer’s loan application has been rejected by the Bank’s competent body authorized to take lending decisions.
    6. Following the loan approval, the customer has failed to appear or to submit the required documents within 10 days of the approval notice.
    7. Other criteria.

If the obligations under the loan agreement are repaid before the due date, the total loan cost will be reduced/refunded proportionally, including the total amount of interest payable under the loan agreement, as well as loan disbursement and servicing fees (if any).

Fees not subject to reduction/refund include application processing fees (if any), state fees (including registration of a right of pledge, etc.), insurance fees, and collateral appraisal fees (if applicable).*

At the time of filing the loan application, the applicant and the guarantor(s) (if any) will be provided with a tailored list of essential consumer loan terms reflecting the individual conditions of the loan to be extended to the applicant.

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. 

In the event of non-performance or improper performance of credit obligations, penalties shall be accrued in accordance with the loan agreement.

The customer shall have the right to unilaterally terminate the loan agreement without any notification of cause within 7 business days following its signing unless a longer period is stipulated in the loan agreement (cooling-off period). In that case, the customer shall be obliged to pay the interest accrued at the effective annual interest rate agreed under the loan agreement. No other compensation may be required from the customer in connection with the termination of the loan agreement.

The customer shall have the right to repay his/her obligations under the loan agreement before maturity, irrespective of whether or not such a right is provided for in the loan agreement.

“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.

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.

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) principle, 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.

* Applies to consumer loans up to and including AMD 15,000,000 (fifteen million).

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