What is loan agreement?
Borrowing money is a big decision that one has to make with great care. No matter you are a lender or a borrower, you can use the loan agreement to protect you from all the misunderstandings and disagreements. The loan agreement is a piece of document in which you can clearly note down the terms and conditions of the loan agreement. This agreement makes clear everything about the loan contract.
When to use loan agreement?
You can use the loan agreement when you are loaning your money to someone. You can also use it when you are borrowing it. If you want to prepare an amortization table, you can use this agreement in order to accurately calculate the amount of interest to be applied for the money. The monthly payment that you will receive on the loan can also be calculated through this agreement which is why most of the people prefer using this agreement.
Since this agreement clears everything, the borrower knows what exactly is expected and both parties are bound to not make any changes in the agreement later without each other’s consent.
Details of the document:
It is very important to make the loan agreement effectively. You can also take the help from a lawyer if you are not sure about the effectiveness of your loan agreement. The main details that are added to the document are:
- The amount of money that is being borrowed and the interest involved in it.
- Plans of repayment of the loan and the options of repayment. It is very important to specify the way the money will be returned by the borrower.
- The collaterals should also be clearly specified in the agreement. This enables the lender to know what the borrower will be bound to offer if he could not pay the borrowed money in the specified time.
- The details of the consigner. The consignor is asked to help when the lender is not sure about the borrower’s ability to pay back the money.
- The details of loan sales should also be added to the agreement.
Preview & Details of Template
Loan Agreement Template
File: Word (.doc) 2003+ and iPad
Size 44 Kb | Download
File: OpenOffice (.odt) Writer [Writer]
Size 12 Kb | Download
License ENERGY [Personal Use Only]
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