Loans for Real Estate Acquisition, Construction, and Renovation
| Loan Purpose | Loan provided for the realization of apartment acquisition and renovation, residential house acquisition, construction, and renovation purposes |
|---|---|
| Borrower Description | Resident and non-resident individuals of the Republic of Armenia aged 23–65 |
| Requirements for the Borrower | The borrower must have a stable income |
| Loan Currency | AMD USD |
| Loan Amount | 1,500,000–100,000,000 AMD or its equivalent in USD for non-resident individuals |
| Loan Term | 36–180 months |
| Annual Nominal Interest Rate | In the case of AMD: 16%–20% In the case of USD: 14%–17% |
| Annual Effective Interest Rate | In the case of AMD: 18.1%–25.95% In the case of USD: 17.73%–27.23% |
| Monthly Service Fee (calculated from the actual loan balance) | - up to 10 million AMD: 0.04% monthly - 10 million – 20 million AMD: 0.02% monthly - starting from 20 million AMD: 0.01% monthly |
| Interest Calculation Procedure | At the annual nominal interest rate on the actual loan balance |
| Loan Disbursement Method | Lump sum or in installments, via non-cash method |
| Loan Repayment Method | Monthly, at the customer's choice: annuity* or differentiated** |
| Other Borrower Expenses | Expenses related to property appraisal, re-appraisal, notarization, state registration, processing, and related costs*** |
| Loan Security | Real estate, other collateral, guarantee, surety, as well as other security provided by the Civil Code of the Republic of Armenia |
| Maximum Loan-to-Collateral Ratio | 80% of the market value of the collateral |
| Early Loan Repayment Penalty | - For contracts up to 15 million AMD, no penalty is applied for the early repayment of the principal loan amount - In case of early repayment of the principal loan amount for contracts exceeding 15 million AMD, a penalty is applied within the following limits: Early repayment can be made at any point of the contractual year up to the amount of the principal scheduled for repayment for that contractual year (a contractual year is considered each 12-month period following the date of conclusion of the crediting agreement). If the above-mentioned amount is exceeded, a penalty is set: - maximum 0.6% if early repayment occurs during the first year of the crediting agreement - maximum 0.4% if early repayment occurs during the second year of the crediting agreement - maximum 0.2% if early repayment occurs during the third year of the crediting agreement |
| Decision Making and Customer Notification | Making a decision takes a maximum of 3 working days after submitting all documents requested by the organization; the customer is notified within one day |
| Loan Disbursement Period | The loan is provided within 1 working day upon receiving the pledge right registration certificate from the relevant state bodies |
| Validity Period of Approved Loan Application | Maximum 15 working days |
| Location of Loan Processing | "Gladzor UCO" CJSC Head Office, Address: 1b Charents Street, N 42, Yerevan |
| Penalty Calculated for Overdue Loan Amount | The calculation of the nominal interest rate does not stop, and simultaneously, a penalty of 0.06% per day is charged on the overdue loan balance |
| Penalty Calculated for Overdue Interest Amount | A penalty of 0.07% per day is charged on the overdue interest amount |
| Factors for a Positive Loan Decision | - Reliable and complete documents - Positive or neutral credit history - Source of stable income - Compliance of the pledged object with criteria acceptable to the organization |
| Factors for Rejecting a Loan Application | - Failure by the customer to submit necessary documents to obtain a loan - As a result of an inquiry to the CBA Credit Registry and/or ACRA Credit Bureau, it turns out that the customer (and, if applicable, co-borrowers, guarantors, as well as co-habiting family members) has a negative credit history. Credit history is considered negative if the customer has had or has credit obligations serviced with delays or classified in accordance with the procedure "On Classification of Loans and Accounts Receivable and Formation of Reserves for Possible Losses of Banks Operating in the Territory of the Republic of Armenia" jointly approved by the Central Bank of Armenia and the Ministry of Finance and Economy of the Republic of Armenia - As a result of the solvency assessment, it turns out that the customer is not solvent - As a result of the appraisal of the property offered as pledge, it turns out that it is not acceptable as a pledge for the organization - Provision of unreliable information by the customer - The loan application was approved, but the customer did not show up or submit the necessary documents within 15 days following the approval - Information regarding the customer became known during the lending process that calls into question the customer's solvency |
| Loan Payment Methods | In cash: directly at the cash desk of "Gladzor UCO" CJSC (Address: 1b Charents Street, N 42, Yerevan). Non-cash: 1. "Ardshinbank" CJSC accounts – AMD 2474602514470000, USD 2474602514470010; 2. "ID Bank" CJSC accounts – AMD 11817068806300, USD 11817068806301; 3. "Artsakhbank" CJSC accounts – AMD 22325000913900, USD 22325000913902; 4. "AMIO BANK" CJSC accounts – AMD 11500583623036, USD 11500993230832; 5. Via Telcell terminals and Telcell Wallet e-wallet, by selecting "Gladzor UCO" CJSC from the list of credit organizations and entering the loan code indicated on the first page of your loan agreement. |
| Additional Services | - A tariff of 20,000 AMD is paid for the extension of the loan agreement - A tariff of 5,000 AMD is paid for changing the loan repayment schedule - A tariff of 20,000 AMD is paid for a certificate (consent) issued by the credit organization for changing the name of the owner of the property serving as collateral, implementing design, construction, and other works, as well as in case of other transactions related to the pledged object - For other services (change of address, registration of a new person, etc.), a tariff of 5,000 AMD is paid |
| Statement Provision Conditions | "Gladzor UCO" CJSC provides consumers with written information on the 16th of each month free of charge via electronic communication (e-mail) regarding the consumer's obligations arising from the credit agreement, the grounds for their occurrence, and repayments, in accordance with the conditions of CBA Regulation 8/05. Statements and their copies are provided to consumers free of charge upon request. |
| ATTENTION |
| WE INFORM YOU THAT THIS TYPE OF LOAN HAS A HIGH ANNUAL EFFECTIVE INTEREST RATE. THEREFORE, CONSIDER SIMILAR SERVICES AVAILABLE IN THE MARKET IN ADVANCE AND ASSESS YOUR ABILITIES TO REPAY THE LOAN. |
| IN THE CASE OF LOANS PROVIDED IN US DOLLARS, FLUCTUATIONS IN THE FOREIGN EXCHANGE RATE MAY HAVE AN IMPACT ON THE LOAN REPAYMENT AMOUNTS. |
| IN THE CASE OF LOANS PROVIDED IN US DOLLARS, THE FOREIGN EXCHANGE RATE FLUCTUATION FACTOR IS NOT INCLUDED IN THE CALCULATION OF THE EFFECTIVE INTEREST RATE AT THE TIME OF LOAN DISBURSEMENT; THEREFORE, THE ANNUAL EFFECTIVE INTEREST RATE MAY CHANGE DEPENDING ON THE CHANGE IN THE EXCHANGE RATE VALUE PUBLISHED ON THE OFFICIAL WEBSITE OF THE CENTRAL BANK OF THE REPUBLIC OF ARMENIA. |
| LOAN INTEREST IS CALCULATED BASED ON THE NOMINAL INTEREST RATE, WHILE THE ANNUAL EFFECTIVE INTEREST RATE SHOWS HOW MUCH THE LOAN WILL COST YOU IF INTEREST AND OTHER PAYMENTS ARE MADE WITHIN THE SPECIFIED TERMS AND AMOUNTS. YOU CAN FIND THE PROCEDURE FOR CALCULATING THE ANNUAL EFFECTIVE INTEREST RATE IN THE "LAW ON CONSUMER CREDITING" UNDER THE "LEGAL ACTS" SECTION OF THE "GLADZOR UCO" CJSC WEBSITE. |
| "YOUR FINANCIAL DIRECTOR" IS AN ELECTRONIC SYSTEM THAT FACILITATES THE SEARCH, COMPARISON, AND SELECTION OF THE MOST EFFICIENT OPTION FOR YOU AMONG SERVICES OFFERED TO INDIVIDUALS www.fininfo.am: |
| YOUR PROPERTY MAY BE FORECLOSED IF YOU FAIL TO REPAY INTEREST AND LOAN AMOUNTS ON TIME. IN CASE OF NON-PAYMENT OF INTEREST AND LOAN AMOUNTS BY YOU ON TIME, INFORMATION ABOUT YOU WILL BE RECORDED IN THE CREDIT REGISTRY. |
| IF THE AMOUNT OBTAINED FROM THE REALIZATION OF THE PLEDGE DOES NOT COVER THE BORROWER'S DEBT, THE REMAINING AMOUNT MAY BE COVERED AT THE EXPENSE OF FORECLOSURE AND REALIZATION OF OTHER PROPERTY OF THE BORROWER. |
| IN CASE OF NON-PERFORMANCE OR IMPROPER PERFORMANCE OF THE OBLIGATION BY YOU, THE LENDER SENDS THESE DATA TO THE CREDIT BUREAU WITHIN UP TO 3 WORKING DAYS, WHERE YOUR CREDIT HISTORY IS FORMED. YOU HAVE THE RIGHT TO OBTAIN YOUR CREDIT HISTORY FROM THE CREDIT BUREAU FREE OF CHARGE ONCE A YEAR. A BAD CREDIT HISTORY CAN HINDER YOU WHEN OBTAINING A LOAN IN THE FUTURE. |
| YOU HAVE THE RIGHT TO COMMUNICATE WITH THE FINANCIAL ORGANIZATION IN YOUR CHOSEN MANNER – BY POSTAL MAIL OR ELECTRONICALLY. RECEIVING INFORMATION ELECTRONICALLY IS THE MOST CONVENIENT: IT IS AVAILABLE 24/7, FREE FROM THE RISKS OF LOSS OF PAPER INFORMATION, AND ENSURES CONFIDENTIALITY. |
| FOR THE PURPOSE OF DUE DILIGENCE OF THE CUSTOMER DEFINED BY THE RA LAW "ON COMBAT AGAINST MONEY LAUNDERING AND TERRORISM FINANCING", THE FINANCIAL ORGANIZATION MAY REQUEST ADDITIONAL DOCUMENTS OR OTHER INFORMATION FROM THE CONSUMER BASED ON THE "KNOW YOUR CUSTOMER" PRINCIPLE, AS WELL AS ASK ADDITIONAL QUESTIONS TO THE CONSUMER DURING ORAL COMMUNICATION (IF SUCH A REQUEST EXISTS). |
| WHEN APPLYING FOR A LOAN IN THE CASE OF LOANS UP TO 15 MILLION AMD, YOU WILL BE PROVIDED WITH AN INDIVIDUAL SHEET OF ESSENTIAL TERMS OF THE MORTGAGE LOAN, IN WHICH THE INDIVIDUAL TERMS OF THE LOAN TO BE PROVIDED TO YOU WILL BE PRESENTED. |
| THE REAL ESTATE PLEDGE AGREEMENT IS MANDATORILY CERTIFIED IN A NOTARIAL MANNER. |
| AT LEAST 7 DAYS BEFORE CONCLUDING THE LOAN AGREEMENT, THE ORGANIZATION PROVIDES THE CUSTOMER WITH THE PROPOSAL TO CONCLUDE THE LOAN AGREEMENT, AFFORDING 7 DAYS AS THINKING TIME. |
THE BORROWER HAS THE RIGHT TO EARLY REPAYY THE LOAN AMOUNT OR A PART OF IT, INCLUDING THROUGH REFINANCING. IN CASE OF EARLY REPAYMENT OF THE LOAN AMOUNT OR A PART OF IT, THE ORGANIZATION WILL PRO RATA DECREASE/RETURN THE TOTAL COST OF CREDIT, INCLUDING THE TOTAL INTEREST PAYABLE ACCORDING TO THE LOAN AGREEMENT AND THE CREDIT DISBURSEMENT FEE. THE FEES FOR APPLICATION REVIEW, STATE (NOTARIAL, REGISTRATION OF PLEDGE RIGHTS, ETC.), INSURANCE, AND PLEDGE APPRAISAL ARE NOT SUBJECT TO DECREASE/RETURN. |
| AT THE BORROWER'S CHOICE, THE ORGANIZATION WILL PRO RATA TO THE EARLY REPAID AMOUNT DECREASE THE AMOUNT OF MONTHLY PAYMENTS, LEAVING THE LOAN REPAYMENT TERM UNCHANGED, OR DECREASE THE LOAN REPAYMENT TERM, LEAVING THE AMOUNT OF MONTHLY PAYMENTS UNCHANGED. |
| THE LENDER IS OBLIGATED TO INFORM BEFORE CONCLUDING THE AGREEMENT THAT IF THE BORROWER FAILS TO FULFILL OBLIGATIONS, THE GUARANTOR WILL PAY IN THEIR STEAD, THE GUARANTOR'S CREDIT HISTORY WILL WORSEN, AND THE LATTER WILL BE DEPRIVED OF THEIR PROPERTY; TO PROVIDE A COPY OF THE LOAN, GUARANTY AGREEMENTS AND REPAYMENT SCHEDULE; TO CARRY OUT COMMUNICATION IN THE MANNER CHOSEN BY THE GUARANTOR; TO NOTIFY 7 DAYS IN ADVANCE ABOUT THE CHANGE OF AGREEMENT TERMS; TO REMIND AT LEAST 1 DAY IN ADVANCE REGARDING THE EXISTING OBLIGATION; IN CASE OF LOAN REPAYMENT DELAY, TO INFORM THE GUARANTOR AT LATEST ONE DAY LATER. |
THE CONSUMER HAS THE POSSIBILITY (IN THE CASE OF LOANS UP TO 10 MILLION AMD OR EQUIVALENT USD) TO PRESENT COMPLAINTS-CLAIMS ARISING FROM THE AGREEMENT TO THE FINANCIAL SYSTEM MEDIATOR IN ACCORDANCE WITH THE RA LAW "ON THE FINANCIAL SYSTEM MEDIATOR", WHOSE WEBSITE IS www.fsm.am: MOREOVER, THE CREDIT ORGANIZATION HAS CONCLUDED AN AGREEMENT ON WAIVING THE RIGHT TO CHALLENGE THE DECISIONS OF THE FINANCIAL SYSTEM MEDIATOR. |
| In the case of the annuity loan repayment method, an equal amount is calculated each month, consisting of the loan principal and interest; however, in the initial period, the amount of interest in that same amount is larger, and the repaid principal is smaller. Over time, this distribution decreases, meaning the amount of principal in the monthly repayment increases, and the amount of interest decreases, but the monthly payments remain unchanged. |
| In the case of the differentiated loan repayment method, the customer pays an equal principal amount each month; however, the interest payments are unequal, decreasing as they are calculated on the remaining loan balance. In this case, total payments decrease toward the end of the loan. Repayments are made with a monthly periodicity. |
| The expenses related to property appraisal and pledging are borne by the borrower (pledgor). The price range of expenses for appraisal, notarization, and state registration: |
| Service Name | Price Range of Provided Service |
|---|---|
| 1. Real estate appraisal | minimum 15,000 AMD |
| 2. Real estate partial certificate | starting from 10,000 AMD |
| 3. Notarization of real estate pledge agreement | 15,000–40,000 AMD |
| 4. State registration of mortgage (real estate) pledge | up to 45,000 AMD |
| 5. Statement/consent in notarial packages | in case of marriage: spouse's consent – 8,000 AMD in case of no marriage: statement of not being married – 1,500 AMD |
Real and Movable Property Appraisal Agencies Cooperating with “Gladzor UCO” CJSC
| Information |
|---|
| “Oliver Group” LLC |
| Address: 8 Tumanyan St., Yerevan |
| Tel.: (010) 54-07-40, (091) 54-27-50, (094) 54-27-60 |
| E-mail: info@olivergroup.am |
| “Uptime” LLC |
| Address: 73/1 Nairi Zaryan St., Yerevan, Macconi Business Center, 1st floor |
| Tel.: (060) 53-53-71, (098) 53-53-14 |
| E-mail: info@uptimeiic.org |
| “Cost Consult” LLC |
| Address: 67 Hanrapetutyan St., Kentron District, Yerevan, Republic Business Center, 2nd floor |
| Tel.: (010) 54-48-82 |
| E-mail: info@cost.am |
| “Gardi” LLC |
| Address: 7 Baghramyan St., No. 4, Yerevan |
| Tel.: (091) 22-01-63 |
| E-mail: gardiltd@gmail.com |
| “ArmEx” LLC |
| Address: 69-3 Nar-Dosi St., Yerevan |
| Tel.: (091) 40-23-40, (098) 40-23-40 |
| E-mail: armexarmenia@mail.ru |
INFORMATION REGARDING THE MAKING OF A LOAN DISBURSEMENT DECISION
The customer's loan application is satisfied if:
- The customer has submitted reliable and complete documents,
- The customer has a positive or neutral credit history,
- The customer has a source of stable income,
- The object of pledge presented by the customer complies with the criteria acceptable to the organization.
The customer's loan application is rejected if:
- The customer has not submitted the documents necessary to obtain a loan,
- As a result of an inquiry to the CBA Credit Registry and/or ACRA Credit Bureau, it turns out that the customer (and, if applicable, co-borrowers, guarantors, as well as co-habiting family members) has a negative credit history. Credit history is considered negative if the customer has had or has credit obligations serviced with delays or classified in accordance with the procedure "On Classification of Loans and Accounts Receivable and Formation of Reserves for Possible Losses of Banks Operating in the Territory of the Republic of Armenia" jointly approved by the Central Bank of Armenia and the Ministry of Finance and Economy of the Republic of Armenia,
- As a result of the solvency assessment, it turns out that the customer is not solvent,
- As a result of the appraisal of the property offered as pledge, it turns out that it is not acceptable as a pledge for the organization,
- Unreliable information was provided by the customer,
- The loan application was approved, but the customer did not appear or submit the necessary documents within 15 days following the approval,
- Information regarding the customer became known during the lending process that calls into question the customer's solvency.
ESSENCE AND IMPORTANCE OF CREDIT HISTORY
Credit history shows how you have fulfilled and continue to fulfill all your financial obligations.
Credit history contains the following information:
- Loans you have received, their quantity and amount, the type and terms of each loan,
- Performance of repayments arising from the loan (e.g., whether you paid interest and principal repayments on time or not),
- Suretyships provided by you to other people, the presence of overdue loans, as well as penalties and fines established for them,
- Unpaid or delayed utility bills,
- The average amount of your salary received in the last six months. By the way, you can quickly and free of charge calculate the net balance of your salary or vice versa.
Credit history does not contain personal information, such as:
- Your ethnicity,
- Political views and membership in other associations,
- Preferences, social status, religious views,
- Data relating to your health.
Your credit history includes data only for the last 5 years from the moment of inquiry. If an inquiry regarding your credit history is made in August 2024, your credit history will reflect information starting only from August 2019.
Credit history is important because when you apply for a loan, the bank or credit organization evaluates how responsible you are as a borrower before making a decision to grant you a loan.
According to RA legislation, ACRA cannot publish any data regarding the data subject without the latter's consent (except for special cases provided by law). An inquiry for a credit report can be made only with the written consent of the given subject. Written consent can be either a separate document or included in the content of the bank's or credit organization's loan application or agreement.
Consent for credit report inquiry at "Gladzor UCO" CJSC is a separate document in the form presented below:
For details: www.acra.am, www.abcfinance.am
ESSENCE AND IMPORTANCE OF CREDIT SCORE
To grant a loan, banks and credit organizations consider your credit SCORE.
The score is your evaluation that assesses you as a borrower, showing how conscientious a borrower you are. The SCORE is formed based on credit history, so if you haven't had loans in the past, you also don't have a SCORE rating.
The purpose of the credit SCORE is single: to help lenders (banks, credit organizations) understand how risky it is to lend to you. A high SCORE indicates low risk and vice versa. Therefore, a high SCORE can help you both in getting a loan or not, and can affect the amount of the nominal interest rate.
Currently, 3 types of SCORE are used in Armenia. ACRA Credit Bureau calculates ACRA and FICO SCORES, and banks and credit organizations use them or apply their own scoring system.
As a customer score rating, "Gladzor UCO" CJSC applies its own score rating, which is based on the following factors:
| Key Factors Underlying Score Rating | Impact of Factors on Score Rating |
|---|---|
| Loan servicing quality | Performing credit obligations with delays decreases the score rating |
| Age of credit history | Long and positive credit history improves the score rating |
| Burden (number of active loans and balance) | High burden with credit obligations decreases the score rating |
| Number, frequency of new loan applications | Frequent inquiries for granting a new loan decrease the score rating |
| Work experience | Long-term work experience improves the score rating |
| Amount of income | The presence of high and stable incomes improves the score rating |
For details: www.abcfinance.am, www.acra.am
IMPACT OF CREDIT INQUIRY ON SCORE RATING
Depending on the type of credit inquiry, it can affect the score types used by ACRA Credit Bureau, namely ACRA score and FICO score, as well as the custom score ratings used by financial organizations. Details regarding the purposes of inquiries and their impact on the credit score are presented in the table below:
| Purpose of Credit Inquiry | Sub-purpose of Credit Inquiry | Impact on Credit Score |
|---|---|---|
| New loan application | Decreases | |
| Guarantor person | New loan application | Decreases |
| Affiliated person | Does not affect | |
| Monitoring of active loan | Does not affect | |
| Guarantor person | – Active loan – Monitoring of active guarantor | Does not affect |
Every time a credit inquiry is made regarding a consumer, if that inquiry is going to affect the credit score rating (Fico, Acra, or custom score), "Gladzor UCO" CJSC informs the consumer about it within a maximum of 2 working days after making the inquiry, indicating the date of the inquiry, the purpose (e.g., granting a new loan, increasing the loan amount) and the type (credit history or score), as well as information or a link to the relevant page of the website(s) containing information about credit history/credit score.
"Gladzor UCO" CJSC informs the consumer of the above-mentioned information free of charge via electronic message. In case of impossibility to send this information via electronic message when making inquiries affecting the consumer's credit score (when the consumer does not have an email address), "Gladzor UCO" CJSC informs the consumer by other available methods (e.g., via text message, in person, or by postal delivery).
For details: www.acra.am, www.abcfinance.am
IMPROVEMENT OF CREDIT HISTORY AND SCORE
How to improve credit history
If you have already formed a "bad" credit history, it is not enough to just "sit and wait" for 5 years to pass and your credit history to "clean up". Throughout that entire period, it is necessary to:
- exclude even one-day delays in fulfilling obligations on current loans,
- fully repay past delays in overdue loan payments,
- avoid becoming a guarantor for unreliable persons in the future.
How to increase the SCORE rating
To increase the SCORE rating, it is first necessary to correct the main reasons for its decrease. In particular, it is necessary to quickly repay active overdue obligations at the first opportunity, as well as:
- ease the credit burden by repaying active loans partially or fully,
- make repayments in accordance with the established schedule, excluding delays and showing punctual behavior,
- reduce the given guarantees by decreasing their number, amount, and ensuring full repayment of overdue obligations in this regard, if any.
For details: www.abcfinance.am, www.abcfinance.am, www.acra.am, www.acra.am
ACTIONS TAKEN TO MODIFY INCORRECT OR INCOMPLETE CREDIT HISTORY
If there is incorrect or incomplete data in the customer's credit history, for the purpose of clarification and correction, the latter, in accordance with the provisions of Article 20 of the RA Law "On Credit Information Circulation and Activities of Credit Bureaus", can inform the credit bureau ("ACRA Credit Reporting" CJSC) or directly apply to the financial organizations providing the information. Notification can be carried out by submitting a relevant written application to the credit bureau or electronically online from the "My ACRA" personal office. The process of receiving and reviewing customer complaints regarding credit reports provided by the credit bureau is defined by the "Dispute Resolution Procedure" of "ACRA Credit Reporting" CJSC.
For details: www.acra.am, www.abcfinance.am
LOANS WITH TERMS DIFFERENT FROM INFORMATION BULLETINS ARE PROVIDED BY THE DECISION OF THE COMPANY'S BOARD
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