Consumer loans

INFORMATION ON THE LOAN DISBURSEMENT DECISION-MAKING PROCESS

A customer's loan application is approved if:

• The customer has submitted reliable and complete documents,
• The customer has a positive or neutral credit history,
• The customer has a stable source of income,
• The collateral offered by the customer meets the criteria acceptable to the organization.

A customer's loan application is rejected if:

• The customer has not submitted the documents required to obtain a loan,
• Following a request to the CBA Credit Register and/or the ACRA credit bureau, it has been established that the customer (and, where applicable, co-borrowers, guarantors, and family members living together with the customer) has a negative credit history. A credit history is considered negative if the customer has had or has credit obligations that were serviced with delays or were classified in accordance with the procedure "On the Classification of Loans and Receivables of Banks Operating in the Territory of the Republic of Armenia and the Formation of Reserves for Possible Losses", jointly approved by the Central Bank of the Republic of Armenia and the Ministry of Finance and Economy of the Republic of Armenia,
• The creditworthiness assessment has shown that the customer is not creditworthy,
• The valuation of the property offered as collateral has shown that it is not acceptable as collateral for the organization,
• The customer has provided unreliable information,
• The loan application was approved, but the customer failed to appear or failed to submit the required documents within 15 days following the approval,
• During the lending process, information about the customer has come to light that casts doubt on the customer's solvency.

THE ESSENCE AND IMPORTANCE OF CREDIT HISTORY

A credit history shows how you have fulfilled, and continue to fulfill, all of your financial obligations.

A credit history contains the following information:

• The loans you have received, their number and amount, and the type and terms of each loan,
• The performance of repayments under the loans (for example, whether you paid interest and principal repayments on time or not),
• The guarantees you have provided to other people, the existence of overdue loans, as well as the penalties and fines established for them,
• Unpaid or late utility payments,
• The average amount of the salary you received over the last six months. By the way, you can quickly and free of charge calculate your net salary from the gross amount, or vice versa.

A credit history does not contain personal information, for example:

• Your ethnic origin,
• Political views and membership of other associations,
• Preferences, social status, religious views,
• Data concerning your health.

Only data covering the last 5 years from the moment of the request is included in your credit history. If a request about your credit history is made in August 2024, your credit history will reflect information only from August 2019 onward.

A credit history is important because, when you apply for a loan, the bank or credit organization assesses, before making a decision to lend to you, how responsible you are as a borrower.

In accordance with the legislation of the Republic of Armenia, ACRA may not disclose any data about a data subject without the subject's consent (except in special cases provided by law). A credit report request may be made only with the data subject's written consent. The written consent may be either a separate document or included in the content of the credit application or agreement of a bank or credit organization.

At "Gladzor UCO" CJSC, the consent for a credit report request is a separate document in the form presented below:

• Consent (individual)
• Consent (legal entity)

For details: www.acra.am, www.abcfinance.am

THE ESSENCE AND IMPORTANCE OF THE CREDIT SCORE

For the purpose of granting a loan, banks and credit organizations consider your credit SCORE.

The score is your rating as a borrower and shows how dutiful a borrower you are. The SCORE is formed on the basis of your credit history; therefore, if you have not had loans before, you do not have a SCORE rating either.

The credit SCORE has one purpose: 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 or not getting a loan and in influencing the size of the nominal interest rate.

Currently, 3 types of SCORE are used in Armenia. The ACRA credit bureau calculates the ACRA and FICO SCOREs, while banks and credit organizations either use them or apply their own scoring systems.

As the customer's score rating, "Gladzor UCO" CJSC applies its own score rating, which is based on the following factors:

For details: www.abcfinance.am, www.acra.am

IMPACT OF CREDIT REQUESTS ON THE SCORE RATING

Depending on the type of credit request, it may affect the types of score applied by the ACRA credit bureau (the ACRA SCORE and the FICO SCORE), as well as the proprietary score ratings applied by financial organizations.

Details of the purposes of requests and their impact on the credit score rating are presented in the table below:

Each time a credit request about a consumer is made, if that request will affect the credit score rating (FICO, ACRA, or proprietary score), "Gladzor UCO" CJSC informs the consumer of this within a maximum of 2 business days after the request is made, indicating the date of the request, its purpose (for example, granting a new loan, increasing the loan amount) and type (credit history or score), as well as information or a link to the relevant page of the website(s) containing information on the credit history/credit score.

"Gladzor UCO" CJSC provides the above information to the consumer free of charge, by electronic message. If it is impossible to send this information by electronic message when making requests that affect the consumer's credit score (when the consumer has no e-mail address), "Gladzor UCO" CJSC informs the consumer by other available means (for example, by SMS, by hand delivery, or by postal delivery).

For details: www.acra.am, www.abcfinance.am

IMPROVING CREDIT HISTORY AND SCORE

How to improve your credit history

If you have already formed a "bad" credit history, simply "sitting and waiting" for 5 years to pass and for your credit history to be "cleared" is not enough. Throughout that entire period you need to:

• Rule out even one-day delays in meeting obligations under current loans,
• Fully repay previously accrued overdue loan payments,
• Avoid becoming a guarantor for unreliable persons in the future.

How to raise your SCORE rating

To raise your SCORE rating, you must first correct the main reasons for its decline. In particular, at the first opportunity you need to quickly repay current overdue obligations, and also:

• Ease your credit burden by partially or fully repaying current loans,
• Make repayments according to the established schedule, ruling out delays and demonstrating punctual behavior,
• Reduce the guarantees you have given by cutting their number and amount and, where applicable, ensuring full repayment of overdue obligations in this regard.

For details: www.abcfinance.am, www.acra.am

ACTIONS TO BE TAKEN TO CHANGE AN INCORRECT OR INCOMPLETE CREDIT HISTORY

If a customer's credit history contains incorrect or incomplete data, then, for clarification and correction, in accordance with Article 20 of the RA Law "On Circulation of Credit Information and Activities of Credit Bureaus", the customer may notify the credit bureau ("ACRA Credit Reporting" CJSC) or apply directly to the financial organizations that provided the information. The notification may be made by submitting a corresponding written application to the credit bureau or electronically, online, from the "My ACRA" personal office.

The process for receiving and examining customer complaints about credit reports provided by the credit bureau is established by the "Dispute Resolution Procedure" of "ACRA Credit Reporting" CJSC.

For details: www.acra.am, www.abcfinance.am

PROCEDURE FOR CALCULATING INTEREST

The interest rate is applied to the actual balance of the loan, based on a 365-day year.

ATTENTION: LOAN INTEREST IS CALCULATED ON THE BASIS OF THE NOMINAL INTEREST RATE. THE EFFECTIVE ANNUAL INTEREST RATE SHOWS HOW MUCH THE LOAN WOULD COST YOU IF YOU PAID THE INTEREST AND OTHER PAYMENTS WITHIN THE ESTABLISHED TERMS AND IN THE ESTABLISHED AMOUNTS. THE PROCEDURE FOR CALCULATING THE EFFECTIVE ANNUAL INTEREST RATE CAN BE FOUND BELOW.

Loan repayment is made:

In cash:

• Directly at the cash desk of the credit organization (address: 1b Charents Street, No. 42, Yerevan),

By non-cash payment:

1. "Ardshinbank" OJSC accounts – AMD 2474602514470000, USD 2474602514470010,
2. "IDBank" CJSC accounts – AMD 11817068806300, USD 11817068806301,
3. "Artsakhbank" CJSC accounts – AMD 22325000913900, USD 22325000913902,
4. "Amio Bank" CJSC accounts – AMD 11500583623036, USD 11500993230832,
5. Through Telcell terminals and the 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.

CONDITIONS FOR PROVIDING STATEMENTS

On the 16th of each month, "Gladzor UCO" CJSC provides consumers, free of charge by electronic means of communication (e-mail), with written information on the consumer's obligations arising from the credit agreement, the grounds for their arising, and repayments, in accordance with the requirements of Regulation 8/05.