April 4, 2019

Features of Subsidized Lending


In the conditions of the current economic state, state assistance to creditors has become a necessity to keep turnover in the domestic market. However, the subsidy program is not available for all categories of credit, but only for industries that need support the most. Let’s talk about the conditions of a subsidized loan in 2017.


What is a subsidized loan?


Subsidized loan – credit relations that have three direct participants: the lender (natural and legal person), the lender (bank) and necessarily the state, which acts as the party providing the subsidy.


Reflection in law.


Reflection in law.


The possibility of granting a subsidized loan to individuals and legal entities, as well as the conditions for subsidizing are reflected in the Decree of the Government of the Russian Federation dated December 28, 2012 No. 1460.


Under what conditions.


Under what conditions.

Subsidized loans are subject to the following conditions:

  1. The need for credit for the development of the organization or the purchase of goods in one of the most unstable markets. These include mortgage, car loans and loans for the development of agribusiness, the acquisition of agricultural technology.
  2. Contacting one of the banks that cooperates with the state subsidy program (Sberbank, Gazprombank and other large Russian banks).
  3. The ability to pay loan payments, confirmed by income certificates.

The terms of the subsidized loan are fixed at the state level, however each bank can make its own small amendments. For example, the conditions for government subsidies in 2017 are as follows:

  1. The minimum loan rate on the Russian market, which may differ depending on the purpose of lending.
  2. Fixed throughout the entire loan period the loan rate and the amount of payments without the possibility of making changes.
  3. Loan term of 5 years.
  4. The inability of the bank to pay the subsidized loan ahead of schedule, provided that the borrower complies with all the conditions of the loan agreement.
  5. Subject to bankruptcy, the debt on the subsidized loan is paid after the full payment of all other debts.

The lender can influence the terms of the contract on such factors as the term of the loan and the interest rate.

Lending period, each bank is entitled to designate its own, but not exceeding the state limit, in the case of subsidized lending. As a rule, a subsidized loan is issued for no more than 5-10 years.

The size of the loan rate over the entire loan period remains unchanged. However, due to compulsory life insurance and property insurance, as well as other payments stipulated by the terms of the contract, the preferential loan rate may increase by up to a few percent, so when signing a loan agreement you need to pay special attention to its conditions.

Thus, with a subsidized loan, the lender remains at the same interest rate on the loan and the amount of payments throughout the entire period of payment, and the state compensates for all expenses due to a change in the market situation. Today, the interest rate of Russian banks is on average several percent higher than the one offered by the state under the subsidized program, so the conditions presented are quite beneficial for both individuals and legal entities.


Line of offers.


Line of offers.


The state offers the service of receiving preferential subsidies both to legal entities and individuals. Today, taking a loan at a subsidized rate is possible for the following purposes:

1. Mortgage – the purchase of an apartment in installments. Subsidized mortgages are issued on the following terms:

  • Lenders pay the first installment of 20% of the cost of housing.
  • Loan rate – 12% per annum without additional payments, if such are provided by the bank.
  • The cost of an apartment is not more than 8 million rubles, that is, housing should be economy class.
  • The apartment is purchased in the primary real estate market – from the developer, but can be purchased at any of the stages of construction.

It should also be noted that the program on which a subsidized home loan is issued is called “Young Family”, which means that two people married who have not turned 35 can apply for a mortgage on the proposed conditions.

2. Car loan – purchase a car in installments. It is possible to buy a car in installments on a subsidized loan basis with only one condition: the car will be included in the list of vehicles that can be purchased on preferential terms. These vehicles include only cars that were manufactured or assembled from imported parts in the territory of the Russian Federation. Such conditions were introduced to support the Russian car industry.

3. A loan for the purchase of agricultural machinery and support of the agricultural business. The loan is issued to legal entities – farmers and founders of agricultural organizations.