The interest accrued to the loans is calculated towards the actual balance of the loan, at nominal interest rate, assuming that a year consists of 365 days.

The annual actual interest rate shows the cost of the loan for you in case if you pay the interest amount and make other payments according to the specified schedule and sizes. 

Example of loan interest calculation

Annual interest amount = balance of the loan amount x annual interest rate /365

Example:

Balance of the loan amount – AMD 2,000,000

Annual interest rate of the loan - 14%

Daily interest amount = 2,000,000 x 14 %/365 = 767.12

Size of penalties - In case of delays in repayment of the loan interest or principal amount, the client pays penalty of 0.13% of the overdue amount (overdue principal amount and overdue interest amount of the loan) for each day of delay, until the 270^th successive day of being overdue. Starting from the 271^st successive day of being overdue, calculation of penalties ceases.

Possibility of early repayment – The customer can repay the loan earlier than the term specified in the contract. With the exception of loans provided by the MCA Armenia Fund, value chain financing loans, loans of the Agricultural Loans Interest Subsidy Program, loans of the "Loan  Ajakic" loan type and agricultural loans with a contractual amount of up to 2,000,000 AMD, in case of early repayment, the borrower shall pay an early repayment penalty in the amounts specified in the tariffs.

In case of early repayment of loans provided by MCA Armenia Fund, the borrower does not pay an early repayment penalty.

Repayment frequency – equal monthly repayments. If the client's cash flow does not allow to set equal repayments, then a free repayment schedule of the principal amount of the loan can be set for the given loan in accordance with the client's cash flow.

Amounts paid for loan repayment are paid in the following order:

1. Penalties, fines,

2. Overdue interest,

3. Overdue principal amount,

4. Accumulated interest,

5. Principal amount of the loan.

Security - Collateral, guarantee.

The following can be accepted as collateral items:

-         real estate (production areas, buildings, houses, apartments, land plots, fish ponds, gardens, and other real estate);
-         vehicles – passenger cars and trucks;
-         agricultural machinery;
-         construction machinery;
-         production lines, equipment;
-         large and small cattle, sows.

The agreement for pledge of real estate is subject to notarial verification. 
The right of pledge for real estate and vehicles is subject to state registration.

The loan to collateral ratio cannot exceed 80%.

The guarantor should possess property or a share in any immovable property that belongs to him/her through the ownership right or should be a legitimate employee of any state or international organization operating in the RA, well-known in the business environment and having good reputation, or should be a CO client, with the CO having financial analysis regarding the client’s solvency, performed not more than 6 months before.

FOR THE GUARANTEES.

We inform you that:

- If the borrower does not fulfill his obligations, then you will pay for him, your credit history will deteriorate and you may be deprived of your property.

- You will be provided with a sample loan, guarantee agreement and repayment schedule.

- Communication will be carried out by the method chosen by you.

- You will be notified 7 days in advance about the change in the terms of the contract.

- A reminder will be sent 1 day in advance regarding the existing obligation.

- In case of delay in repayment of the loan, you will be informed about it after one day at the latest.

THE GUARANTEE HAS THE RIGHT:

- Request information about the amount of the loan balance from the lender at any time.

- To recover from the borrower the sums paid by you for the loan, as well as other losses incurred on behalf of the borrower.

Loan service fee: 0-0.1% per month, depending on the source of financing.

A loan servicing fee is only required for the loans disbursed through the Millennium Challenge Account (MCA) and International Fund for Agricultural Development (IFAD) funds. 

The loan service fee is calculated on the actual loan balance.

Loan service repayments are determined on the day of each loan repayment schedule of loan principal / interest rate.

-     In case of cash operations with commercial banks and payment organizations, the customer may be required to pay cash withdraw fee up to 0.25% of the amount.

-     When repaying the loan principal and interest by the customer through the payment terminals payment organizations, a commission fee of 100-300 AMD will be charged for each transaction.

In case of collateralized loans, possible costs of the customer for the services provided by third parties.

Approval of the loan application– The decision on the loan application is made within 7 business days after receiving the application. The customer is informed about the decision regarding the loan application within 1 banking day. The loan is provided within 1 banking day after the client submits the complete set of documents required for lending and completes the pledge process.

Loans with the funds of the MCA-Armenia Fund are provided in the presence of a positive conclusion from the fund.

The loan amount is provided in a non-cash way, through RA banks and settlement organizations. 

ATTENTION: When applying for a loan, the lender willV provide you, the guarantor(s) (if any) with an individual sheet of essential terms of the consumer loan, in which the individual terms of the loan to be granted to you will be presented.

Factors to satisfy the loan application

- Compliance of the client's creditworthiness level with the organization's requirements

- Positive credit history

- Compliance with the level of loan security

- Compliance with the purpose of the loan

Factors for rejecting a loan application

- Insufficient level of creditworthiness of the client according to the requirements of the organization

- Provision of unreliable data by the client

- Negative credit history - Incompatibility of collateral, guarantors

- Inconsistency of the purpose of the loan

Documents required to obtain a loan

-  Personal identification document;

-  PSN or a reference on absence of a PSN;

-  Documents evidencing the right of ownership for the collateral item offered by the client;

-  Copies of passports of the guarantors and pledgers.

Factors for rejection of the loan application

- Head of legal entity/individual entrepreneur client. a copy of the certificate of registration of the registry and AVC

- A copy of the identity document of the director of the legal entity client

- A copy of the charter of the legal entity client

- Reference from the unified state register regarding the legal entity client

- A copy of the ownership certificate or lease agreement of the legal entity/individual entrepreneur client's place of business

- The decision of the founders of the legal entity client on obtaining a loan

- Copies of the identity document of the founders and related persons of the legal entity client Depending on the circumstances, other documents may be required.

For the purpose of due diligence of the customer defined by the Law of the Republic of Armenia "On Combating Money Laundering and Financing of Terrorism", the consumer may request additional documents or other information based on the "Know your customer" principle, as well as ask additional questions during oral communication. to the consumer (if there is such a request).

During the term of the contract, loan statements are provided via e-mail at thirty-day intervals, unless the customer chooses another communication method. Loan statements (including a copy) are provided free of charge. The amounts of fees charged for the provision of information are defined in the tariffs.