Loan contract or commonly known as loan agreement is a document that must be owned or created for borrowers and lenders. This document contains a two-party agreement for business about borrowing. It is closely related to the borrower who promised to return or repay the loan on the lender up to a certain time period. In addition known as the loan contract, this document is also often referred to as the loan agreement, term loan, secure or unsecured loans, promissory note, promise to pay, and demand loan. But the function of all those documents is the same which is about the promise from the borrower to pay the loan back to the lender until in certain period of time.
Using the loan contract document will facilitate the borrowing and lending transactions that you do especially if you are the lender. It can happen because you can legally force the borrower (even though it is indirectly) to return the borrowed money until a certain time. You will be protected by the document, as well as a lender and a borrower has been agreed to the terms and conditions, as stated in the document. So if the borrower did something wrong and do things out of the document, then you should take certain actions. But the borrower is also entitled to pay off the loan in one-time payment. This document is very useful to monitor the borrower. Other than that it is also useful for borrower because it can keep clean their track record about credit.
Loan contract document can be used for a variety of business interests. With the use of this document, the rights and obligations of you, as a lender, can be read clearly in the document as well as the rights and obligations of this the borrowers. The documents can be used for business loans (loans to start a business in large amount), business of property loans (such as real estate, land, and the like), loans for educational purposes, purchasing stuff such as furniture, home appliances, vehicles, and other objects, as well as personal loans between family members or colleagues. As stated before, this document usually contents about the detail about lender and borrower, the method of payment (it is also included interest), how much amount of the loan the lender give to the borrower, and collateral relation. With different information needed to be written inside for different purposes, you can’t use loan contract template below as it is. You need to modify it first, and getting a lawyer involved should be better as usually they already have their own templates.
Loan Contract Template (36.0 KiB, 455 hits)