HSBC Property Secured Personal Loan

Property1 secured personal loan are provided to finance individual accountholders to cover personal and investment purpose expenditures, including purchasing and/or construction/renovation of commercial and residential properties for buy-to-let purposes, purchasing of land plot, acquisition of business shares, excluding financing of any business activity.

Benefits

  • Affordable
    We offer property secured loans in AMD and in USD.
  • Straightforward
    No annual service fee is charged, you only pay once for receiving the loan.
  • Convenient
    We process your loan application within 5 days after receiving all documents so you can have quick access to your money.
  • Flexible loan
    Choose loan currency and term to best suit your needs.

Product overview

Debt-to-Income Ratio

In case customer’s income and loan currency are both in AMD, the following ratio will apply:

  • 60%, if net monthly salary / income is < AMD700,000 
  • 70%, if net monthly salary/ income is ≥ AMD700,000

In case customer's loan currency is in USD, the following ratio will apply: 

  • In case customer’s USD income comprises 50% or more of their monthly income, the following ratio will apply: 40%, if net monthly salary / income is < AMD350,000 OR 50%, if net monthly salary/ income is ≥ AMD350,000 
  • In case customer’s USD income comprises less than 50% of their total income, USD loan amount and debt-to-income ratio (DIR) will be calculated so that monthly loan repayment amount in USD is fully matched by the USD share in customer’s total income subject to DIR, and the following will apply: 40%, if net monthly salary / income is < AMD350,000 OR 50%, if net monthly salary/ income is ≥ AMD350,000

Loan amount

  • AMD 2 million - AMD 5 million (or equivalent in USD): in this case relevant documents supporting loan purpose may not be required
  • AMD 5 million - 60 million2 or (equivalent in USD): in this case loan purpose should be supported by relevant documentation (proof of purchase or investment)

Loan to Value Ratio

For loans in AMD:

Amount of secured loan with property pledge cannot exceed 70% of the property value if located in Yerevan and prospective suburbs and 50%, if located elsewhere in Armenia.

For loans in USD:

Amount of secured loan with property pledge cannot exceed 50% of the property value if located in Yerevan and prospective suburbs and 25%, if located elsewhere in Armenia.

Loan account service fee3

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

  • AMD 50,000 if the loan amount is less than or equal to AMD 5,000,000 (or equivalent in USD)
  • AMD 100,000 if the loan amount is more than AMD 5,000,000 (or equivalent in USD)

Loan currency

Loan is provided in AMD and USD4.

Loan term5

From 24 months to 60/1206 months.

Interest rate7

Property secured loans are provided with floating nominal interest rates.

Floating annual nominal interest rate

Loans in AMD:

Floating annual nominal interest rate is calculated at HSBC Bank Armenia AMD base rate plus fixed Interest Rate Margin of 3.5% p.a. and is currently equal to: 

9.5% + 3.5% = 13%

Annual percentage rate starting from 13.81% for loans in AMD.

Loans in USD:

Floating annual nominal interest rate is calculated at HSBC Bank Armenia USD base rate plus fixed Interest Rate Margin of 1.75% p.a. and is currently equal to: 

9.25% + 1.75% = 11%

Annual percentage rate starting from 11.62% for loans in USD.

Loan interest amount is being calculated based on the annual nominal interest rate, whereas the annual percentage rate or APR indicates how much would loan cost to borrower in case of repayment of interest amount and other payments under the defined timeline and terms.

Notes:

  • Loan interest is calculated in the loan currency on a daily basis for 365 days and for 366 days in case of leap year on the loan outstanding balance
  • Accrued interest for the loans in foreign currency is subject to repayment with the loan currency or in AMD along with the monthly principal amount

Loan repayment

The following repayment options are available for the borrowers:

  • Principal is repaid in equal monthly installments, while interest amount decreases with the repayment of a 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. For USD loans, in case if annuity repayment type is chosen, full repayment amount (monthly interest and principal amount) will be charged in AMD

Security and insurance

  • Property is pledged to the Bank until the full repayment of the loan
  • Borrower must provide pledged property insurance opting from the list of insurance companies acceptable for the Bank. The insurance policy should be reissued every year within the whole term of agreement. Should the borrower fail to arrange the insurance, the Bank will arrange insurance at the borrower's cost8
  • Beneficiary rights of the insurance policy will be entitled to the Borrower
  • Insurance can be done either by full market value of the property or by loan amount upon borrower’s discretion. If the property is insured for part of its value insurance compensation will be paid in the same proportion ratio of the sum insured and the property's full market value
  • The Bank reserves the right to demand early repayment of the loan, if insurance terms of the pledged residential property9 specified in residential property mortgage agreement are breached

Note:

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".

In case loan monthly repayments are not processed in line with the loan schedule and loan agreement and in case you do not properly meet your loan obligations, your property may be repossessed and you may be deprived of your rights over it.

1Land can be accepted as a pledge only at bank’s discretion.
2AMD 5million – AMD 60 million (or equivalent in USD) amount is considered only for investment purpose loans. Loan purpose supporting documentation should be provided.
3No loan arrangement fee (AMD 50,000 – AMD 100,000 depending on loan amount) is applicable for property secured personal assistance loan for HSBC Plus and HSBC Status customers.
4Loans can be provided in USD if loan purpose is property purchase (including commercial one), renovation, and/or reconstruction. Loan purpose supporting documentation should be provided. Loans in USD can be provided only to customers who have income in USD (full or partial), or whose income in AMD is linked to USD exchange rate. The Bank may require documents evidencing the income currency, or the income link to USD exchange rate. 
5Customer's minimum age is 18. Customer's age plus the loan term should not exceed 65 years.
661-120 month loan term is considered only for investment purpose loans. Loan purpose supporting documentation should be provided.
7Depending on risk assessment results, loan application may be approved at a higher than stated interest rates.
8Cost of property insurance may vary from 0.16% to 0.18% of property valuation amount.
9Valuation and security pledge expenses are born by the customer. 

Eligibility

You are eligible to apply for a property secured personal loan if you're an Armenian National or RA resident1 ; and meet the minimum criteria for salaried and non-salaried account holders.

Salaried account holder criteria

You must have:

  • an account with us
  • at least 3 months employment with a company maintaining satisfactory banking relationship with us or other banks in RA
  • a net monthly salary of at least AMD 50,0002;

Your salary should be transferred to your account with us after loan provision (in case if prior salary transfer is not required by the Bank3).
 

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

  • an account with another bank
  • at least 12 months employment history
  • a salary transferred to your account for 6 months
  • a net monthly salary of at least AMD 200,000

Non- salaried account holder criteria

You must have a satisfactory banking relationship with us or other local banks for 6 months and more, and your last 6 months average monthly balance and average balance for the last month must be at least:

  • AMD 100,000 (or equivalent in other currency) if your account is with us
  • AMD 250,000 (or equivalent in other currency) if you account is with another bank

1Persons with minimum 1 year of residence in Armenia proven by respective documents are considered as Armenian residents.
2Customer's overall monthly income should not be less than AMD 100,000.
3The requirements on salary transfer to your account with the Bank will be communicated to you during the loan approving process.

Things you should know

Apply online

Complete the online application form and our customer service representative will contact you within 48 hours.

Apply by phone

Call our Contact Centre at +374 60 655 000.

Apply in branch

Alternatively, you can visit one of our branches, where our staff will be glad to give you further information and process your application.

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Last updated on: 2/3/2019 09:08:16 PM