All you wanted to know about loan refinancing
Media Room

Loan refinancing is a good way to handle financial difficulties or simply to cut the expenses by taking the same loan on more favorable terms. Refinancing enables you to get a bigger loan for a longer term and at a lower interest rate, reduce the amount of monthly payments, consolidate several loans, etc. Loan refinancing offers are few in the market, but they exist. Ameriabank has launched a loan refinancing campaign for those borrowers who want to use their financial resources and time efficiently. We inquired from Ameriabank staff about everything you would like to know about loan refinancing and are now going to tell you everything in due order. Today our reporter will have an interview with Andranik Khachatryan, Head of Branches Coordination Division, and Ofelya Martirosyan, project manager, Ameriabank CJSC.

Mr. Khachatryan, the situation in the credit market is really hard. Liabilities of the business sector and population to financial institutions are a hot topic of discussions. How would you assess the current situation?

The situation is hard both in Armenia and former Soviet Union states. Forecasts about rapid recovery of economy did not come true and we failed to ensure GDP growth rates and economic activity as they were before the crisis. Besides, due to expectations of rapid recovery from the 2008-2009 crisis, many businessmen got themselves a lot of loans but as a result of downturn and decrease of consumer demand they found themselves facing a sharp crunch. Revenues of some companies decreased by 20-30%, and under the conditions of 15-20% devaluation of Armenian dram and inflation, it was evident that repayment of loans, especially USD loans, would become rather difficult. Note that unreasonably optimistic expectations in a certain sense trigger growth of non-performing loans. Many people are waiting for the good times to come and for the problem to disappear. Yet, we think that those will be the luckiest who keep their head and are able to make a decision in any situation. We live in a new realty, which is perhaps not favorable enough, but stable, and it seems that all of us have adapted to the new realty. We are used to having difficulties and know that we are able to be active, continue to grow and develop in the new environment too.

In this new situation businessmen have become more careful; they do not take the risk of launching new projects and expanding the current business.

They not only avoid investing in business, but very often those who already have liabilities are not able to take additional credit burden and develop the business. We always carefully monitor clients’ needs. We know very well that financial flows of clients have changed. We understand that they need the bank’s support and new long-term banking products at competitive interest rates. Given the current situation and wishing to contribute to the growth of economic activity Ameriabank launched a loan refinancing campaign offering to the borrowers of other banks to extend the loan term. The campaign is effective till August 01, 2016 and covers business loans, mortgage loans, consumer loans secured by real estate or vehicle, non-revolving credit lines and overdrafts. Loan refinancing enables to reduce monthly loan repayments and spare your resources which may then be used for solving other problems.

I would like to note that the previous year was very successful for us in terms cooperation with international financial institutions. We almost doubled the bank’s capital and now thanks to it, Ameriabank can offer the best terms of lending. Now then, this offer is not intended for clients who have problems with loan repayments. If the borrower’s income progressively decreases and he or she is not able to ensure proper servicing of loan, this problem needs other solutions. We want to attract people who need new approaches to loans and their repayment, whose income has perhaps dropped a bit but remains stable. To these clients we are ready to offer terms according to which loan repayments will be structured to match their income. This is why the offer covers those loans which have minimum one year of servicing history. My colleagues further on will, of course, tell you about Ameriabank’s loan refinancing offer in detail. I will only say that this product is intended for those who want to consolidate their loans, have a more convenient repayment schedule, reduce the amount of monthly repayments thus making loan servicing more comfortable and effective. Also please note that while refinancing your loan you can increase the loan amount, if required.

The next question is addressed to Ofelya Martirosyan. I have seen your advertisements with Hypo and Bizo about refinancing of loans. It seems that Ameriabank could not help being creative also in this field. 

We have been thinking over and discussing the characters of the advertising campaign for a long time and decided to take the risk. We pictured a family with stable monthly income and a USD loan, which spends 30% of its monthly income for repayment of the loan. In the situation with devaluation of the Armenian dram, decrease of family income and inflation, the family spends a greater part of its budget on repayment of the loan and it seems that a new family member needing too much money has appeared. The situation is the same with SMEs – as if a new employee has been hired who “absorbs” the greater part of the budget while the company is trying to cut the expenses. This was how the idea of expressing the loan in the form of a creature absorbing the funds of the family or business appeared. Of course the idea needed to be personified. And we decided to create a light, joyful and pleasantly naughty character who will create positive emotions and express the key message of the campaign, i.e. Ameriabank’s offer to lighten the borrower’s credit burden.

For a serious industry like banking creation of such character is a very bold step…

Yes, the style of the commercials of this campaign is different from Ameriabank’s image. We had even prepared ourselves to repel criticism. But we were surprised and pleased to see that both our employees and the public liked this idea and the names Hypo and Bizo (abbreviations of hypothec and business-loan) really got the fancy of people. And which is most important, once the campaign was launched, sales volumes exceeded all our expectations, which means that we managed to fulfil our task, i.e. show to people that a reasonable and well-structured loan actually boosts prosperity and development of business, helps to enjoy the life and the opportunities it creates.

Thank you for interesting information.

Tomorrow we will talk about a very popular topic: “What benefits does Ameriabank offer for SMEs?”


Updated 09.06.2016, 12:13
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