Individual loans provided to individuals by products / Terms and Tariffs /

Loan purpose

The loan is granted for acquisition, renovation, modernization or construction of commercial property, i.e industrial, public, or other commercial area, building (from the primary and the secondary market).

For renovation and construction loan provisions cost estimation of anticipated expenses is taken into consideration.

Who can apply

Individual residents of RA between the age of 18-63, whose age will not exceed 63 years throughout the loan service period or have a co-borrower meeting the above criteria throughout the loan service period.

Loan currency

AMD, USD, EURO

Loan amount

Property purchase, Construction  

From AMD 10,000,000 till AMD 120,000,000 or equivalent in foreign currency

Renovation

From AMD 5,000,000 till AMD 30,000,000 or equivalent in foreign currency

Loan repayment period

Property purchase, Construction

AMD

Constant-Up to 180 months 

Floating-Up to 240 months

Constant-Up to 180 months 

Renovation

Up to 84 months 

Annual nominal interest rate

Fixed interest rate

 13.7%-17% 

USD

EUR

Floating interest rate

Mentioned interest rate + 0.2%

The floating interest rate becomes effective upon the expiration of the 36th month of the loan agreement as a loan interest rate specified in the agreement. The variable component of the floating interest rate is revised regularly - twice a year – on February 1 and August 1. As a variable component the interest rate applicable (actually published on the website) in the Bank is applied since the forthcoming revision date following the expiration of the 36th month.
The floating interest rate is a nominal interest rate which is calculated according to the following formula.
𝑹𝐅 = 𝐑𝐕 + 𝐑𝐌
where RF – Floating interest rate
RV – Variable component
RM – Fixed component

The variable component of the floating interest rate (RV) is defined on the basis of the following market rates, depending on the loan currency:

• The calculation of the main variable component in AMD is based on the yield to maturity of Armenian 6-month Government (treasury) bills. Information on the yield to maturity of Armenian 6-month Government (treasury) bills can be retrieved from the relevant publications (yield curve) on the official website of the CBA at the following link: https://www.cba.am/am/SitePages/fmofinancialmarkets.aspx.
  The variable component is reviewed on February 1 and August 1 each year. The variable component as of February 1 is equal to the average applicable interest rate effective for the period from June through November of the previous year. The variable component as of August 1 is equal to the average applicable interest rate effective for the period from December of the previous year through May of that specific year.
  Whenever the above indicator becomes inaccessible or irretrievable and the definition of the interest rate becomes impossible for the next period, the interest rate for the next period is determined based on the secondary indicator used by the Bank.
• The calculation of the secondary variable component in AMD is based on the interest rates of the AMD-denominated deposits (except demand ones) of individuals for a one-year term which are published by the CBA. Information on the interest rates of the AMD-denominated deposits (except the demand ones) of individuals for a one-year term can be retrieved from the relevant publications on the CBA website at the following link: https://www.cba.am/am/SitePages/statmonetaryfinancial.aspx.
  The secondary variable component is revised on February 1 and August 1 each year. The secondary indicator as of February 1 is calculated as an average of the interest rates published from June through November of the previous year. The secondary indicator as of August 1 is calculated as an average of the interest rates published from December of the previous year through May of that specific year.

• The calculation of the main variable component in USD is based on the interest rates of the USD-denominated deposits of individuals for a one-year term which are published by the CBA. Information on the interest rates of the USD-denominated deposits of individuals for a one-year term can be retrieved from the relevant publications on the CBA website at the following link: https://www.cba.am/am/SitePages/statmonetaryfinancial.aspx.
  The variable component is revised twice a year on February 1 and August 1. The variable component as of February 1 is calculated as an average of the interest rates published from June through November of the previous year. The variable component indicator as of August 1 is calculated as an average of the interest rates published from December of the previous year through May of that specific year. Whenever the above indicator becomes inaccessible or irretrievable and the definition of the interest rate becomes impossible for the next period, the interest rate for the next period is determined based on the secondary indicator used by the Bank.
• The calculation of the secondary variable indicator in USD is based on Overnight secured financing rate for 6-month term (CME Term SOFR USD 6 Month). Information on Overnight secured financing rate for 6-month term can be retrieved from the relevant publications on the Bloomberg terminal at TSFR6M link. The variable component is revised twice a year on February 1 and August 1. The variable component as of February 1 is calculated as an average of the interest rates published from June through November of the previous year. The variable component as of August 1 is calculated as an average of the interest rates published from December of the previous year through May of that specific year.
• The calculation of the main variable component in Euro is based on the European Interbank Offered 6-month Rate (EMMI EURIBOR 6 Month). Information on the European Interbank Offered 6-month rate can be retrieved from the relevant publications on Bloomberg terminal using the EUR006M link.  The variable component is revised twice a year on February 1 and August 1. The variable component as of February 1 is calculated as an average of the interest rates published from June through November of the previous year. The variable component as of August 1 is calculated as an average of the interest rates published from December of the previous year through May of that specific year.
• The calculation of the secondary variable component in Euro is based on the 6-month yield curve of the German government bonds. Information on the interest rate of the 6-month yield curve of the German government bonds can be retrieved from the publications on Bloomberg terminal using the YCGT0016 link.

In case of moving from the primary to the secondary variable component an adjustment factor can be applied.

+4%

No early loan repayment fee is applicable

Penalty for loan principal and/or interest overdue

For overdue principal - 0,015 % daily,
For overdue interest - 0,1 % daily

Loan repayment security measure

The property that is being purchased, renovated, other property. In case of construction, the land plot where the property should be constructed/the property under construction.

Loan to value ratio^[1]

Purchase from primary market (constructor)^[2]

AMD-Up to 90% of the property value
Other currency-Up to 70% of the property value

Purchase from secondary market

AMD-Up to 85% of the property value
Other currency-Up to 70% of the property value

Construction and renovation

Up to 70% of the property value

Insurance

Property insurance – mandatory to do each year on loan’s outstanding amount

Loan provision methods

· Non-cash – the amount is transferred to the seller’s account
· Loans for renovation and construction purposes are granted one-off or in phases. It is determined by the Authorized body responsible for loan approval.
· In case if loan is provided in phases, then those phases are defined taking into consideration anticipated cost expenditure provided by the customer, loan term, loan amount, customer’s creditworthiness.

Other terms

· In case of property purchase the Borrower credits prepayment ^[3] on the Bank’s account which is being frozen till loan disbursement 
· The borrower may not make a prepayment and instead pledge additional property. In this case the loan amount provided to the Borrower should not exceed the estimated market value of the property to be purchased, meanwhile keeping 70% loan to value ratio.
· In case of property purchase from primary market as a document confirming the prepayment, the Customer may present to the Bank payment slip provided by the constructor and/or prepayment agreements/consents.
· In case of obtaining the “purchase right” of the property, the “purchase right” can be considered as loan security. In this case the Bank can request to pledge the funds credited on the constructor’s special account in the favor of the Bank in order to secure:

a) the constructor’s obligation to transfer the property to the buyer upon completion of the construction
b) the constructor’s obligation to return the prepayment to the buyer in case of termination of “the right of purchase” agreement
c) Upon completion of the construction and along with receiving the ownership certificate of the property, to fulfill the obligation to register the pledge on the name of the Bank

Deadlines for approving or rejecting loan provision

· The decision to approve or reject the loan is made within 10 (ten) working days maximum, after fully providing all the initial documents requested by the Bank.
· The loan is disbursed in case of positive decision made by the Bank and within maximum 2 (two) working days since the property is pledged.