A Loan Agreement is actually a contract which documents a type of financial agreement between a borrower and a lender, recognized as the two parties involved in this kind of a contract. This agreement is also referred to as a Loan Contract, Demand Loan or Term Loan. Such a contract mentions the payment dates, the repayment plan, any interest charges and the amount of the loan. A clear outline about the loan terms is given to the lender as well as the borrower by a written contract of this type. Know about the requirement of a simple Loan Agreement.
Loan Details Should Be Mentioned
This kind of contract offers information about the amount of loan that is lent to the borrower as well as the time period within which the repayment has to be made by the borrower. The loan agreement execution serves as a promise for loan amount payment to the borrower from the lender. Lending or borrowing money happens to be a major commitment. Naturally, it is essential to safeguard both parties, with the execution of such kind of a simple loan agreement template. Giggle Finance is a quick, secure, and moment subsidizing stage for application based consultants, private companies, self employed entities, and dealers.
Loan Amount Has to Be Specified
The loan agreement sample must clearly specify the amount of loan that is taken from the lender by the borrower, referred to as the Principal Amount. It is the amount of money that is given to the borrower. Such a document also defines the time period for loan granting.
Mentioning the Interest Clause
The loan agreement format must state the rate of interest that must be paid by the borrower, along with the principal. This kind of a document also makes a mention of the additional costs or the penal interest which have to be paid for a default in the payment of the principal as well as the interest amount.
A Loan Agreement is a type of contract which is signed between two parties, a borrower and a lender, involving a transaction that includes a Loan. This type of document can be signed between two individuals, or two companies, or an individual and a company. Such kind of a document works like a written, legal evidence.
Contains all the essential loan details
This kind of an agreement contains all the essential pieces of information about the loan that is taken, such as the total amount of the loan, the name and address of both the borrower and the lender, the loan amount interest rate (in case applicable), when the loan agreement becomes effective, when the loan amount has to be repaid, the when the loan amount has to be repaid – in case the amount of loan is supposed to be paid in installments, the jurisdiction that the agreement is valid under. The details and signature of a guarantor is needed as well, if the entire amount of loan is of high value.
Mentioning a collateral
Such a contract may be either unsecured or secured. Generally, in case of a secured loan, it is important to pledge some kind of asset as a Loan Collateral. This can be a home, car etc. In case of a default, the security pledged might be used to recover the amount of loan. You may download many other legal forms here from the website.
