Car Loan

Loan is provided in AMD.

The loan amount of cars purchased from primary market:

• from 3 million to up to AMD 40 million
  
• can't exceed 70% of the car value, respectively minimum prepayment amount that should be arranged by customer is 30%
• Loan amount is calculated based on the lower of the current market value as per the car valuation act and car purchase price
  

The loan amount of cars purchased from secondary market:

• from 3 million to up to AMD 20 million
  
• can't exceed 60% of the car value, respectively minimum prepayment amount is 40%
• Loan amount is calculated based on the lower of the current market value as per the car valuation act and car purchase price

The ratio of overall monthly loan payments to net monthly income can not exceed 60% if net monthly income is less than AMD700,000 and 70%, if net monthly income is greater than or equal to AMD 700,000.

From 24 up to 60 months.

The following one-off loan provision fee will be charged to the customer’s account

• 1% of loan amount, maximum AMD 100,000
• 0,5% of loan amount, maximum AMD 100,000 for PLUS and STATUS customers
  

Loan account fee is charged on loan provision day.

The following repayment options are available for the borrowers:

• Principal is repaid in equal monthly installments, while interest amount decreases with the repayment of principal. Therefore, monthly repayments will decrease over the loan tenor.
• Repayments are calculated on annuity basis, where both principal and interest monthly repayment amounts change over the loan tenor, while the total monthly repayment amount remains constant.

Note: The accrued interest will be billed monthly and is subject to payment along with the monthly principal amount repayment.
 

In case you have outstanding obligations towards the creditor, the following repayment order will apply, when you fulfil your obligations:

1. Penalties
2. Interest
3. Principal
   

• In case of overdue/default on loan principal and/or interest the Bank will apply penalty interest rate - 5% p.a. plus the loan nominal interest rate per annum, on the overdue amount.

No early repayment fee is applicable.

You can make loan early repayment by decreasing the outstanding loan amount as follows:

1. By equally reducing the amount of monthly payments and leaving the loan term fixed, or
2. By reducing the loan term by leaving monthly payments fixed.
   

Note

IN CASE OF EARLY REPAYMENT, THE TOTAL COST OF THE LOAN, INCLUDING LOAN PROVISION FEE, WILL BE PROPORTIONALLY DECREASED BY THE BANK.

1. Security and Insurance

1.1. Borrower must be the owner of the car to be pledged.

1.2. The car is pledged to the Bank (firm pledge) until the full repayment of the loan.

1.3. Borrower must provide car insurance opting from suggested list of insurers1. The insurance policy should be reissued every year during the whole term of the agreement. Should the borrower fail to arrange the insurance, the Bank will arrange an insurance at the borrower's cost.

1.4. Beneficiary rights of the insurance policy will be entitled to the Customer.

1.5. The insurance amount must be equal to the market value of the car.

1.6. The bank reserves the right to demand early repayment of the loan, if the borrower breaks insurance terms specified in the Pledge Agreement.

2. Warning and important notes

2.1. If the customer fails or regularly delays the loan repayment or any of obligations specified in loan agreement, the Bank reserves the right to repossess the pledged car, without recourse to the court and use the sales proceeds for full repayment of the loan outstanding amount.

2.2. In case if the value of the pledged car is not sufficient to cover the customer's obligations, the obligations may be paid-off at the expense of the creditor's other property, in accordance with the RA legislation.

2.3. If the borrower does not pay the interest and loan principal amounts in time, information about credit history will be submitted to the Central Bank of Armenia credit register and ACRA Credit Reporting CJSC.

2.4. The bank makes the decision on provision of loans at its discretion taking into consideration the conformity of the loan application to the announced requirements of the given loan type as well as evaluating such essential factors as the creditworthiness of the applicant, any overdue payments and other factors.

2.4.1 The bank may require the customer’s obligations to be secured with a guarantee at its discretion, based on risk assessment results.

Information for guarantor

2.5. Loan is provided for buying cars intended for personal use only.

2.6. Car loan is not provided for motorcycles as well as for cars manufactured more than 120 months ago.

2.7. Loan drawdown will be done after submission of pledge and insurance agreement/ policy.

2.8. The loan will be transferred to customer's bank account.

2.9. Valuation and security pledge expenses are borne by the customer. Find detailed information about the expenses by following the link Vehicle Valuation Pledging | Fees & Charges.

2.10. Customers can apply for a loan at any of the bank branches/offices.

2.11. Bank does not compensate charges and fees applicable for documents and other transactions required for loan processing. All fees are paid by Customer.

3. The deadlines for decision making of loan application and loan provision/drawdown

3.1. The maximum period for making final decision and informing the applicant - within 2-5 working days after the submission of all other necessary documentation as requested by the Bank.

3.2. The maximum period for loan provision/drawdown–within 2 working days after the receipt of pledge certificate.

4. Loan approval and declination criteria

4.1. Loan approval criteria

• Documented and stable income, which corresponds to the minimum set requirements for a particular loan type.
• Good credit history, with number of overdue days for all loans during the recent 12 months not exceeding maximum threshold set by the bank.
• Full document set required for the loan process.

4.2. Loan declination criteria

• Insufficient funds for servicing the loan, or undocumented income.
• Information that the loan will not be used for designated purpose.
• Incorrect and incomplete information provision as part of the loan process.
• Bad credit history, with number of overdue days for all loans during the recent 12 months not exceeding maximum threshold set by the Bank.
• Customer age does not meet the age related criteria for the specific loan type.

¹Cost of car insurance is equal to 2.5% of the car market value.

The bank will provide customers with statements for their loan accounts in the manner and terms stipulated by the RA legislation. The statements can be delivered to the customer's postal address, sent via email or collected from any branch of the bank. You can familiarise yourself with the conditions, terms and fees for provision of statements, copies of statements or other information by referring to Tariff of Charges and Terms and conditions.

BEFORE SIGNING THE LOAN AGREEMENT, INDIVIDUAL BULLETIN TO BE PROVIDED AS PER CENTRAL BANK OF ARMENIA REGULATION 8/05 "ON BUSINESS CONDUCT RULES OF FINANCIAL ORGANIZATIONS".

We would also like to inform you that there may be differences between the Individual Bulletin and mortgage lending agreements due to changes in the repayment schedule and (or) the exchange rate.

The terms of the Individual Bulletin are valid for 10 working days after informing you, as a consumer, about the positive decision of the credit application. In case the consumer (guarantor) wants to sign the Individual Bulletin immediately, the Bank gives sufficient time to the consumer (guarantor) to read the Individual Bulletin in detail. If the consumer submits the signed Individual Bulletin to the Bank later than the established term, the Bank decides whether to sign the lending or mortgage lending agreement under those conditions in accordance with its internal legal acts or no.

ATTENTION: IN CASE OF NOT MAKING YOUR LOAN MONTHLY REPAYMENTS IN LINE WITH THE LOAN SCHEDULE YOU CAN BE DEPRIVED OF RIGHTS AGAINST PLEDGED PROPERTY. INFORMATION ABOUT DELAY WILL BE SUBMITTED TO CENTRAL BANK OF ARMENIA AND ACRA CREDIT REPORTING CJSC WITHIN THREE WORKING DAYS, RESULTING IN NEGATIVE IMPACT ON YOUR CREDIT HISTORY, SHOULD YOU DECIDE TO APPLY FOR ANOTHER LOAN IN THE FUTURE. YOU HAVE A RIGHT TO OBTAIN YOUR CREDIT HISTORY FROM CREDIT BUREAU FREE OF CHARGE ONCE A YEAR.

¹Customer's minimum age is 18. Customer's age plus the loan term should not exceed 65 years.

²Depending on risk assessment results, loan application may be approved at a higher interest rate.

³1% lower than standard annual nominal interest rate for HSBC Plus and HSBC Status customers. The rate is variable and is currently equal to 9% + 6% = 15%

Where: 9% - Bank’s AMD Retail Base Rate, 6% - constant margin, instead of 7%

Annual percentage rate starting from 23.29%.

You're eligible to apply for a Car loan if you're an RA Resident¹ and meet the minimum criteria for salaried and non-salaried account holders.

You must have:

• an account with us
• at least 3 months employment with a company maintaining a satisfactory banking relationship with us or with another bank in RA
• a net monthly salary of at least AMD 200,000

Your salary should be transferred to your account after loan drawdown (in case if prior salary transfer is not required by us)².

If you don't have account with us, you must:

• have account with another bank
• at least 3 months employment history
• a salary transferred to your account for 3 months
• a net monthly salary of at least AMD 250,000

You must have a satisfactory banking relationship with us or other local banks for a period of 3 months and more, and the last 3 months average monthly balance and average balance of the last month have been at least:

• AMD 200,000 (or equivalent in foreign currency) if your account is with us
• AMD 250,000 (or equivalent in foreign currency) if your account is with another bank

¹Persons with minimum 1 year of residence in Armenia proven by respective documents are considered as Armenian residents.

²The requirements on salary transfer to your account with us will be communicated to you during the loan approving process.