Create a high quality document online now! Create Document A loan agreement is a written agreement between a lender and borrower. The borrower promises to pay back the loan in line with a repayment schedule (regular payments or a lump sum). As a lender, this document is very useful as it legally enforces the borrower to repay the loan. This loan agreement can be used for business, personal, real estate, and student loans. Loan Agreement. Dated: ______. FOR VALUE RECEIVED, the undersigned, ______ (the 'Borrower'), located at ______, ______, ______ ______, hereby promises to pay to the order of ______, (the 'Lender'), located at ______, ______, ______ ______, the principal sum of ______ together with interest on the. Forms by Type – For the borrowing of money from one family member to another. – The acceptance and confirmation of money that has been borrowed from one (1) party to another. Does not commonly give details about how or when money will be paid back or list any interest rate, payment penalties, etc. – If someone does not have sufficient credit to borrow money this form allows someone else to be liable as well if the debt is not paid. – For most loans from individual to individual. – After a note has been paid-in-full this document should be issued as proof that the borrower has satisfied their debt. – Frees the Guarantor from responsibility and is no longer liable. – Loan agreement that lists assets that are to be handed to the lender if the payment is not made in accordance with the form. – Similar to a standard loan agreement, a document that lists a promise to pay with dates, interest rate, and penalties (if any). Table of Contents • • • • • • • Using a Loan Agreement A loan agreement can come in many variations and the purpose for a loan are a many. An individual or business can use a loan agreement to set out terms such as an amortization table detailing interest (if any) or by detailing the monthly payment on a loan. The greatest aspect of a loan is that it can be customized as you see fit by being highly detailed or just a simple note. No matter the case, any loan agreement must be signed, in writing, by both parties. Lending Money to Family & Friends – When talking about loans, most relate loans to banks, credit unions, mortgages and financial aid but hardly do people consider obtaining a loan agreement for friends and family because they are just that – friends and family. Why would I need a loan agreement for people I trust the most? A loan agreement is not a sign that you don’t trust someone, it is simply a document you should always have in writing when loaning money just like having your driver’s license with you whenever you drive a car. The people who give you a hard time about wanting a loan in writing are the same people you should be worried about the most – always have a loan agreement when lending money. How to Get a Loan Step 1 – Choose a Loan Type • Business Loan – For expansion or new equipment. If the business is new or in bad financial shape a by the owner of the entity may be required by the lender. • Car Loan – Used to purchase a vehicle usually with a term of 5 years (60 months). • FHA Loan – To purchase a home with bad credit (cannot be below 580). Requires the borrower to purchase insurance in the chance of default. • Home Equity Loan – Secured by the borrower’s home in case the funds are not paid-back.
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March 2018
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