☐ There are late charges. If the borrower is unable to make a payment due under this agreement within days of the due date, the borrower agrees to pay the lender a late fee equal to -1% of the amount due at the time. Depending on the amount of money borrowed, the lender may decide to have the agreement approved in the presence of a notary. This is recommended if the total amount, the capital plus interest, is more than the maximum acceptable rate for the small claims court in the jurisdiction of the parties (usually 5,000 usd or 10,000 USD). While loans can be made between family members – a family credit contract – this form can also be used between two organizations or companies that have a business relationship. Guarantees – An item of value, for example. B a home, is used as insurance to protect the lender if the borrower is not able to repay the loan. III. PROMISE TO PAYThe borrower promises to pay the lender $8,000.00 and interest within 12 months. ☐ borrower has the right to pay, in whole or in part, the loan, in whole or in part, with accrued and unpaid interest, at any time without advance penalty or advance premium. The borrower must immediately inform the lender in writing of the advance and the amount of the advance. Discount (Check One) Short: A loan agreement is a formal legally binding document that constitutes both positive and negative agreements between the borrower and the lender in order to protect both parties if one of the parties does not meet its commitments. Relying only on a verbal promise is often a recipe for a person who gets the short end of the stick.
If the repayment terms are complicated, a written agreement allows both parties to clearly define all the terms of payment and the exact amount of interest due. If a party does not respect its side of the agreement, the written agreement has the added benefit that both parties understand the consequences. A template for a free credit contract is mentioned shortly before, but a legal document. It must contain specific information in clear legal language. If the lender or borrower decides to take legal action, a simple loan agreement must have correct and clear information. It`ll make all the difference if you put your case before a judge in court. Each presentation of personal credit contracts or alternative credit contract models contains “must have” information in the document.