Loan with Bad Credit History: Is It Possible to Get One in Armenia?

Getting a loan when you have a history of missed payments and outstanding debts may seem impossible. However, in reality, there is still a chance—everything depends on how severe the credit history issues are and what types of loans you consider.

Let's go through the steps to check your credit history, understand different levels of bad credit reputation, explore ways to improve the situation, and find out which banks in Armenia offer loans to borrowers with debts.

How to Check If You Have a Bad Credit History?

Before assuming you have a bad credit history, check it first. In Armenia, ACRA Credit Reporting is responsible for credit history records. You can request your credit report online.

If your report shows:

1. Frequent late payments,
2. Major delays,
3. Closed loans marked as "Unpaid",

then you indeed have a bad credit history. However, if your report looks good, congratulations! Banks will gladly process your loan application.

How Banks Evaluate Bad Credit History?

Not all bad credit histories are the same. Banks categorize applicants based on the severity of past financial issues. There are three levels of bad credit:

1. Mild Level – Minor late payments in the past, but all loans have been repaid. High chances of getting a new loan.
2. Moderate Level – Significant delays (60-90 days), either on closed or active loans. Some banks in Armenia may approve your loan, but the terms will be less favorable.
3. Critical Level – Multiple long-term defaults, legal actions, or large outstanding debts. In this case, banks are unlikely to approve a standard loan, but alternative options are available.

Can a Bad Credit History Be Fixed?

The good news is that credit history is not permanent—it updates over time! Older negative records lose their impact if you improve your financial discipline.

How to improve your credit score?

1. Repay existing debts – Banks monitor this, and clearing debts increases trust.
2. Use small loans – Get a small credit card or installment loan and make payments on time.
3. Avoid new late payments – Repeated violations will worsen your score.
4. Ignore scammers – "Fix your credit score for money" offers are scams!

Be patient—repairing a credit history takes time.

Which Banks in Armenia Offer Loans to Borrowers with Debts?

Yes, it is possible to get a loan with bad credit history. While many banks avoid lending to high-risk borrowers, some evaluate multiple factors, such as:

1. Your salary level
2. Employment history
3. Collateral availability

Tip: If one bank rejects your application, try multiple banks—each has different approval criteria!

Collateral Loans: A Better Option for Bad Credit Borrowers

If your credit score is too low and banks keep rejecting you, consider a secured loan instead. These loans use collateral (such as property, a car, or gold) to increase approval chances.

Which Banks in Armenia Offer Collateral Loans?

If you have bad credit history and banks keep rejecting your loan applications, a secured loan (loan with collateral) can be a good alternative. These loans are easier to get because the bank takes less risk, making approval more likely.

Some of the best banks in Armenia currently offering collateral loans include:

1. Converse Bank – Offers loans with interest rates starting from 13.24% per year. If you are using gold as collateral, the bank values it at 33,300 AMD per gram (999 purity).
2. Inecobank – Provides secured loans starting at 14.93%, with a gold valuation of up to 46,350 AMD per gram.
3. Ardshinbank – Issues loans from 17.16%, assessing gold at 35,000 AMD per gram.

Why is a collateral loan easier to get?

1. Banks take less risk, so they approve loans more easily.
2. Interest rates are lower than unsecured loans.

Risk Warning: If you fail to repay, the bank will take your collateral. Only choose this option if you are confident in repaying the loan.

Alternative: Borrowing from Credit Organizations (But Expensive)

If traditional banks refuse your loan and you don’t have collateral, consider non-bank credit organizations. These lenders offer loans without checking credit history, but interest rates are high (30% or more).

Examples of Armenian Credit Organizations Providing Loans Without Credit Checks:

1. Ayo Credit
2. Smart Credit
3. Global Credit

Be cautious: These loans can trap borrowers in a debt cycle due to high interest rates. Always calculate your ability to repay before applying!

Final Tips and Key Takeaway: How to Increase Your Chances of Getting a Loan?

If you have a bad credit history but need a loan, follow these steps:

1. Check your credit history through ACRA.
2. Try a small loan (installment plan or credit card) and repay it on time.
3. Apply to multiple banks – each has different requirements.
4. Consider a collateral loan – approval chances are higher.
5. Explore non-bank credit organizations (but be careful with high rates).

Don’t give up! Even with bad credit, you can rebuild your financial reputation and access better loan offers in the future.

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