Posted by: Arlene Kuehner at March 02 2018 02:25:09.
What, exactly, was the amount of the money owed? Most importantly, a loan agreement makes it clear that the money given was, in fact, a loan – and not a gift. Also, it tidies up the loan by setting out payment requirements. Is the loan to be paid back in installments, or all by a certain date? Is there any interest being charged on the loan, or late charges if the loan is not paid back?
The loan agreement will typically have detailed information about the borrower, including their personal information, creditworthiness, income, and expenses. This information is required in order for the lender to determine if they are willing to proceed with the transaction.
The personal loan agreement is an unsecured contract that allows one party to borrow money, the borrower, from someone else, the lender, in exchange for the lender to be paid more money in return of payment. A loan ca be constructed in a number of ways, but the most common is for the borrower to pay back a portion on a timely basis until the lender it is fully reimbursed. During the course of the payments, the lender collects an interest on the balance not paid yet. The longer the loan has not been paid back, the more money the lender will receive cumulatively throughout the term of the loan.
While mentioned in brief earlier, a free loan agreement template is a legal document. It must contain specific information in clear, legal language. In the event the lender or borrow decides to pursue legal action, a simple loan agreement must have correct and clear information. It will make all the difference when you take your dispute before a judge in a court of law. Every personal loan agreement template or alternative loan contract template has “must have” information in the document.