Many people borrow in their lifetime, be it building a house , buying a condo , buying a car, or buying something. As a matter of proof, a loan agreement is entered into with banks and credit intermediaries for each loan. At the same time, banks use a standardized loan agreement template for each loan . This is done because the characteristics of the loan are the same for all loans and they are always repeated.

 

Loan Agreement Template

Loan Agreement Template

These standard contract samples contain the most important points to be considered in the loan. The loan contract submission initially includes the person of the borrower and the legal entity of the lender. Thus one knows, between whom the loan contract came off. Another important point is the amount of the loan, so there are no legal disputes later on the amount of the loan taken up. Very important is also the interest and any applicable processing fee. In the interest calculation, the nominal interest rate and the effective interest rate must be stated.

The indication of the effective rate is required by law so that borrowers can see what the actual cost of the loan is. If a fixed interest rate is agreed, this must be included in the loan agreement. If this agreement is missing, the interest rate is variable and the interest rate depends on the capital market. The nature of the repayment and the amount of the regular repayment are points of the loan agreement, thus the lender can prove how the repayment has to be made. Likewise, the ordered securities are listed in each loan agreement. This is important if the recovery of collateral should occur. The indication that the customer has been informed about the terms and conditions and that they have been handed over to him is an important part of every loan contract.

 

Loan agreements must comply legal standards

Loan agreements must comply legal standards

For banks, borrowers can assume that the loan agreements comply with legal standards. However, it often happens that loans are granted by private individuals . If these are still relatives or good acquaintances, they are often granted interest-free.

Also in these cases, an interest-free loan contract should be set up and signed. An interest-free loan agreement provides the lender with a piece of evidence to prove in later disputes that he is entitled to repayment. An interest-free loan agreement also secures the rights of the borrower that have been agreed.

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