What is a loan agreement?
Under the loan agreement, one party (lender) transfers to the other party (borrower) property or other property determined by type, and the borrower undertakes to return the same amount of money (loan amount) to the lender or property of the same type and quality equal to the property received from the lender.
How is the loan agreement concluded?
According to the law, the loan agreement is concluded in a simple written form, which implies that this agreement does not require notarization.
A receipt given by the borrower or other document certifying that the lender has given a certain amount of money or a certain amount of property to the borrower may be submitted in support of the terms of the loan agreement.
Failure to keep the written form will invalidate the loan agreement. Such an agreement is void.
The loan agreement is considered concluded from the moment of transferring AMD or other property.
Dispute over the loan agreement
In case of intending to sign a loan agreement, the parties discuss whether the lender will receive interest or not. In both cases, the law allows the contract to be signed. The agreement must clearly indicate the presence or absence of interest in the loan agreement.
By law, the lender has the right to receive interest on the loan amount from the borrower, unless otherwise provided by the loan agreement. The loan agreement must clearly define the amount of interest the calculation procedure. At the time of concluding the loan agreement, the interest rate may not exceed twice the bank interest rate set by the Central Bank of the Republic of Armenia. The bank interest rate set by the Central Bank of the Republic of Armenia is 12%, so the maximum amount can be 24%.
If the borrower does not fulfill his obligation stipulated in the contract, the interest stipulated in the loan agreement terminates, and only the interest provided for in Article 411, Clause 1 of the Civil Code of the Republic of Armenia is subject to payment, starting from the day when the money was to be returned to the lender. the day:
The borrower can repay the interest-free loan early.
The loan amount with interest can be repaid early only with the consent of the lender, unless otherwise provided by law or the loan agreement.
3. The loan amount is considered returned at the moment of handing it over to the lender or transferring it to his bank account, unless otherwise provided by the loan agreement.
Dispute over the loan agreement
According to the law, the borrower has the right to challenge the loan agreement if he proves that he did not actually receive any money or other property from the lender or received less than the amount specified in the contract.
It should also be noted that according to the law, the testimony of witnesses may not be considered evidence in the event of a dispute over a loan agreement by the borrower, except in cases where the contract was entered into by fraud, violence, intimidation, malicious consent of the borrower's representative or other serious circumstances.