Guarantee (personal) – If someone does not have enough credit to borrow money, this form allows someone else to be liable if the debt is not paid. Borrower – The person or company that receives money from the lender, who then has to repay the money according to the terms of the loan agreement. Has a friend, relative or colleague borrowed money from you? Read our article with smart strategies that will help you get your money back. The categorization of loan contracts by type of facility usually leads to two main categories: Promissory Note – A promise of payment from a debtor and a creditor lending money. 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). Interest (Usury) – The costs of borrowing money. A loan agreement is a written agreement between a lender and a borrower. The borrower promises to repay the loan according to a repayment plan (regular or lump sum payments). As a lender, this document is very useful because it legally requires the borrower to repay the loan.
This loan agreement can be used for commercial, private, real estate and student loans. Loan contracts usually contain information about: It is easy to make a credit contract on Rocket Lawyer. Just answer a few critical questions, and we generate the right legal language for your contract. Before you write your own credit contract, you need to know some of the basic details that are included. For example, you need to determine who the lender and borrower are, and you need to know the terms and conditions of your loan, for example.B. how much money you borrow and how you expect to be repaid. Interest is a way for the lender to calculate money on the loan and offset the risk associated with the transaction. CONSIDERING that borrowers intend to borrow a fixed amount; and loan contracts by commercial banks, savings banks, financial companies, insurance companies and investment banks are very different from each other and all feed for different purposes.