October 14, 2014 - 15:44 AMT
PanARMENIAN.Net - Since the launch of the student loan program, Areximbank-Gazprombank Group extended loans to a number of Armenian students.
The government of Armenia kicked off the student loan program in spring of 2013. The bank joined the program in summer to extend its first loans in September.
“Anyone has a right to education in the 21st century, yet not everyone can afford it. So, in this context, the government-initiated program is particularly welcome,” said Eduard Karapetyan, chief specialist at the retail lending operations department.
“Since the launch of the program, the bank extended loans to students of the State Engineering University of Armenia, the National Agrarian University and the Russian-Armenian (Slavonic) University. Before the launch, some banks offered student loans at much worse terms,” Karapetyan said. “The state program is subsidizing the loan interest as well. The government pays off up to 3% in interest on the loan for straight-A students and 2% for the rest,” he said.
“The loan guarantor’s solvency is an important condition – the former should not be paying off major loans at the time. For instance, if you want to take a student loan for your son, but you are paying off your own loan, these payments should not exceed 40% of your salary. If all required documents are available, the loan can be extended in a day or two,” he said.
Karapetyan believes student loans to be less risky compared to other consumer loans. “Investing in our children, their education and development is paramount, with the investment undoubtedly to pay off in future,” he said.
Under the government program, loans are extended to students aged 16-30 for bachelor or master courses for a maximum of 10 years, with students to only pay off the interest in the first four years. The original loan amount and the interest are paid in equal installments upon completion of the course. Student loans are provided at 12% per annum, interest accrues on the outstanding balance. Maximum loan amount is AMD 1,800,000, annually AMD 450,000. The loan requires two guarantors, individuals or legal entities with stable monthly income. One of the borrower’s parents must be among guarantors (or the third guarantor with zero income).