How to Get a Loan Without Guarantors in Armenia and Avoid Overpaying: A Complete Guide

Want to take out a loan but don’t want to involve guarantors? In Armenia, many banks offer loans without the need to bring in third parties — but such loans come with specific features that you should consider in advance. In this article, we’ll cover:

1. What a guarantor is and who cannot be one
2. The difference between a co-borrower and a guarantor — and when a co-borrower is required
3. Which types of loans in Armenia can be taken out without guarantors
4. Which banks in Armenia offer loans without guarantors
5. What documents are needed to apply for a loan without guarantors

Loan Without a Guarantor: Is It Possible?

A guarantor is someone who agrees to take on the borrower’s financial obligations if the borrower is unable to repay the loan. The bank checks the guarantor’s income, credit history, and overall solvency. However, if the borrower repays the loan on time, the guarantor has no interaction with the bank.

Who cannot be a guarantor?

1. Individuals with a poor credit history
2. People without official income
3. Pensioners (in some banks)
4. Individuals under 18

Back then, guarantors were required for large loans, but today many banks are ready to issue loans without them. This is especially relevant for those who:

1. Don’t want to burden friends or family with financial obligations
2. Can’t find someone willing to be a guarantor
3. Want to maintain full financial independence

Important:

The absence of a guarantor does not automatically mean higher interest rates or smaller loan amounts. However, some banks may still deny a loan because of this. Fortunately, there are ways to secure favorable loan terms without needing a guarantor — especially if you're applying for a mortgage. In that case, you can involve a co-borrower, and no guarantor will be required.

What’s the Difference Between a Co-Borrower and a Guarantor — and When Is a Co-Borrower Needed?

Many people confuse guarantors with co-borrowers, but these are two very different roles. Both can help you get approved for a loan, but their responsibilities are not the same.

Key characteristics of a guarantor:

1. Commits to repaying the loan if the main borrower fails to do so
2. Their income is not included when calculating the borrower’s maximum loan amount
3. Can be released from their obligations in some cases (e.g., if the loan is fully repaid or refinanced without a guarantor)
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Key characteristics of a co-borrower:

1. Shares equal responsibility for repaying the loan — if one borrower stops paying, the other must continue making full payments
2. Their income is combined with the main borrower’s income, which can allow for a larger loan
3. Cannot withdraw from the agreement without the bank’s consent — if one co-borrower wants to opt out, the loan must be restructured

When Is a Co-Borrower Required?

In Armenia, involving a co-borrower when applying for a loan may be necessary in a variety of situations, especially in mortgage lending. Below are the most common cases where banks may require a co-borrower:

1. Mortgage loans:

When purchasing residential property, banks may request a co-borrower to increase the borrower’s solvency or reduce risks. For instance, if the borrower doesn’t meet certain requirements — such as age limits or minimum income thresholds — having a co-borrower may become a mandatory condition.

1. Secured consumer loans:

For consumer loans backed by property or collateral, banks may require a co-borrower — particularly if the main borrower doesn’t meet certain criteria, like age or income.

1. Student loans:

Under government programs aimed at improving access to higher education, banks may provide tuition loans to students. In such cases, if the student lacks sufficient income, involving a co-borrower or guarantor may be a requirement.

1. Car loans:

If the borrower has insufficient solvency or lacks adequate collateral, the bank may insist on adding a co-borrower to reduce credit risk.

1. Loans for education or professional development:

In some cases — especially if the borrower has no stable income or limited credit history — a co-borrower may be required to guarantee loan repayment.

What Loans Can Be Taken Without a Guarantor in Armenia?

Banks in Armenia offer various types of loans that can be obtained without a guarantor. However, the terms of such loans may vary: in some cases, the interest rate will be higher, and in others — proof of income, a co-borrower, or collateral may be required.

Here are the main types of loans without a guarantor available to borrowers in Armenia:

1. Consumer loans – the most accessible option for personal needs
2. Credit cards – a convenient way to borrow with the possibility of a grace (interest-free) period
3. Student loans – for tuition payments; some banks offer a grace period
4. Mortgages without a guarantor – possible if there is stable income and collateral or a co-borrower
5. Car loans – require collateral, but not a guarantor
6. Collateral-backed loans – property or gold serves as sufficient guarantee, so no additional guarantors are requested

Who Most Often Becomes a Co-Borrower?

1. Spouses – if a family is buying property, the bank usually issues the loan to both partners
2. Close relatives – parents, children, brothers or sisters may act as co-borrowers
3. Business partners – sometimes entrepreneurs take joint loans for business development

A Co-Borrower Is an Advantage!

Joint ownership of property

A co-borrower, unlike a guarantor, doesn’t just take on repayment obligations — they become a full legal co-owner of the property. This means their ownership rights are legally recognized, and in the future they may claim their share in case of sale or inheritance of the property.

Ability to borrow a larger amount

One of the key advantages is that the bank sums the incomes of the borrower and the co-borrower, allowing for a higher loan amount. This is especially important if you want to purchase a more spacious or higher-quality home but your income alone isn’t enough to qualify for the desired amount.

More favorable loan terms

The higher the total income of the borrowers, the lower the risk for the bank. This means that with a strong combined repayment capacity, it’s possible to get a lower interest rate and extend the loan term, which reduces the monthly payment.

There are important nuances to consider!

1. The co-borrower is responsible for repayment

If the main borrower stops repaying the loan for any reason, the bank will demand repayment from the co-borrower. The co-borrower is just as responsible for the debt as the main borrower.

1. It’s important to budget carefully

The bank may approve a larger amount than you initially planned. However, you shouldn’t take a mortgage that maxes out your financial capacity — monthly payments may turn out to be too high. Don’t forget about other monthly expenses like utilities, insurance, and personal needs. If the payments are too large, this could lead to serious financial strain.

1. Division of ownership shares in the property

Before becoming a co-borrower, it’s essential to clearly agree on who will own what share of the property. Otherwise, conflicts may arise in the future. The best approach is to sign an additional agreement or include all owners in the purchase contract.

The table below outlines the key terms of these loans:

Lifehack: You can take out a loan secured by real estate and use it to purchase an apartment. In this case, no guarantor is required.

Where to Get a Loan Without a Guarantor?

Many banks offer loans without requiring a guarantor, but certain conditions must be met. The table below presents several current offers from such banks:

What Documents Are Required to Apply for a Loan Without Guarantors?

To get a loan without guarantors in Armenia, you typically need the following documents:

1. Identification document: Passport or ID card
2. Public Services Number (social card): If not integrated into the ID card, a separate document must be provided
3. Proof of income: Confirmation of your income, such as a certificate from your employer or other supporting documents
4. Copies of identification documents of the collateral owners: If the loan is secured by property, you’ll need copies of the property owners’ ID documents
5. Documents proving ownership of the collateral: If the loan is secured, you must provide documents confirming ownership of the pledged property
6. Additional documents: Depending on the bank’s policies, additional documents may be required, such as the loan application form, certificate of family composition, or other supporting materials

If the Loan Is Without Guarantors but With a Co-Borrower

In Armenia, if a co-borrower is involved in a loan without guarantors, the following documents are usually required:

1. Loan application form: A completed form provided by the bank
2. Identification documents:
3. For both the borrower and the co-borrower: passport or ID card
4. For RA citizens: Public Services Number (social card) or ID card with an integrated number
5. Proof of income:
6. Income verification for both the borrower and the co-borrower, such as a certificate from the employer or other supporting documents

Documents for Collateral-Backed Loans (if applicable):

1. Ownership documents: Property ownership certificate
2. Property appraisal: An appraisal report conducted by an accredited valuation company
3. Property insurance: Insurance policy for the pledged property (may be required by the bank)

Additional Documents:

1. Certificate of family composition: Information about the borrower's family members or a signed declaration of family status
2. Guarantor certificate: If a guarantor is involved

Note: Requirements may vary depending on the bank’s internal policies and the type of loan. It is recommended to check the complete list of required documents in advance with the specific bank you choose.

Summary: What You Should Know Before Applying for a Loan Without Guarantors

Loans without guarantors are available in Armenia. However, the absence of a guarantor may affect the loan terms — the bank may compensate for the risk by offering a higher interest rate or approving a smaller amount.

A guarantor is a person who takes legal responsibility for your debt and is obligated to repay it in full if you are unable to do so for any reason.

A co-borrower is not a guarantor — they are a full participant in the loan agreement.

Banks offer different terms for loans without guarantors. It’s important to compare offers — some banks may provide lower interest rates, while others may offer more flexible repayment conditions.

Student loans are available but often require proof of solvency. Sometimes banks request income verification from parents or offer loans with deferred payments until after graduation.

In mortgage lending, a co-borrower can be a decisive factor in loan approval. However, keep in mind that they share equal responsibility for repayments.

If you’re a non-resident planning to purchase property in Armenia with a mortgage and don’t have guarantors, you may consider applying to Evocabank (you might need a co-borrower with confirmed income).

Some banks offer real estate–backed loans without requiring a guarantor. For example, IDBank provides loans secured by real estate both with and without income confirmation, and does not mention a guarantor requirement.

The key advice — don’t rush. Compare terms on AFM and make an informed decision!