What is a Loan Agreement?
A personal loan agreement is a legal document that is completed by a lender and a borrower to establish the terms and conditions of a loan. The loan agreement, or “note”, is legally binding. This document is considered to be a contract and therefore the borrower shall be expected to abide by its terms, conditions, and governing laws. A Loan Agreement is a document between a borrower and lender that details a loan repayment schedule.
Why should I use a Loan Agreement?
Using a Loan Agreement can protect you as a lender because it legally enforces the borrower's pledge to repay the loan in regular payments or a lump sum. A loan contract is also useful to a borrower because it spells out the details of the loan for his or her records and is handy for keeping track of payments.
What is included in a Loan Agreement?
* Liability Details of Loan: Agreed between Brrower and Lender. A Lender and borrower can be either an individual or corporation. * Repaymet of Loan The schedule outlines when the loan needs to be repaid by. It can be in one of two ways: fixed date and notice to repay/demand loan agreement. * Late Charges (if any) Later Charges Terms may be agreed, any payment not remunerated within appointed days of its due date shall be subject to a belatedly charge of percentage of the payment. * Security/Collateral Collateral is a form of security for the lender in the event the borrower is unable to repay them. For security, collateral may be included by a Loan Agreement. Common forms of collateral may include a vehicle, equipment, or jewelry. * Failure to pay If for any reason Borrower not succeeds to make any payment on time, Borrower shall be in default. The Lender can then order instant payment of the entire remaining unpaid balance of this loan, without giving anyone further notices. If Borrower has not paid the full amount of the loan when the final payment is due, the Lender will charge Borrower interest on the unpaid balance at percent per year. * Collection fees If this note is placed with a legal representative for collection, then Borrower agrees to pay attomey's fee of fifteen percent (15%) of the voluntary balance. This fee will be added to the unpaid balance of the loan. * Co-borrowers (if any) Any Co-borrower signing this agreement agree to be likewise accountable with the borrower for this loan.
* The free templates above are provided for reference only, for all legal matters, you should always talk to a professional.
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