An investment loan agreement refers to a binding contract that is made between two or more parties to validate a loan process. There can be many types of loan agreements starting from simple promissory notes between friends and family to more detailed agreements like mortgages, auto loans, etc. A proper investment loan agreement can be just more than just short letters that states how long a borrower has to pay back back the money and what interest may be added to the principal.
10+ Investment Loan Agreement Templates in PDF
1. Investment Loan Agreement Fund Template
2. Sample Investment Loan Agreement
3. Investment Loan Agreement Application Template
4. Investor Loan Agreement Format
5. Investment Home Loan Agreement Template
6. Investment Loan Agreement Example
7. Basic Investment Loan Agreement
8. Investment Grant Loan Agreement Template
9. Simple Investment Loan Servicing Agreement
10. Investment Loan Agreement Program Application
11. Investment Loan Agreement Order Form
How to Write a Personal Loan Agreement?
It’s never easy to ask friends and family members for money, for you or the person you ask. When you write an informal personal payment agreement, you will make it easier to show your would-be lender that you find the loan to be a significant obligation and expect to repay the money. It takes little time to write the agreement, but it could be the one thing that will convince the lender like your parents or a family friend to lend you money.
Step 1: Start the Document
Start by writing down the date at the top of that page. If you establish an informal private payment agreement before receiving the loan, please fill in the date you receive the money.
Step 2: Provide the Terms of the Loan
State the intent of the personal payment agreement and the terms and conditions for the return of the money. For instance, if you borrow $300 to repair your car, and plan to return $100 a week, note it down.
Step 3: Provide the Date of the Document
It is very important to provide the exact dates in your agreement. It is just common sense but ignoring it is quick. The repayment of the loan depends on the date of the formation of the agreement. To repay the money select a start and finish date and write down.
Step 4: Give the Statement of Agreement
You can write “The lender and borrower agree to the terms mentioned above.” This must be only a few lines below the repayment schedule to highlight the fact that both parties agree.
Step 5: Signature
The deal will be genuinely impossible to implement without a signature. Print the names of the lender and creditor below the declaration of agreement. Leave room for both to sign the treaty.
Step 6: Record the Agreement
Go down to the office of the county clerk, and record the deal. The loan will now be covered against loss of paperwork by either party and will have the psychological effect of feeling “actual”.
What is the Purpose of a Loan Agreement?
The main purpose of a loan agreement is to explain what the parties who are involved in the agreement agree to, what duties each party has and for how long the agreement will last. A loan agreement must comply with state and federal laws which will cover both lender and borrower should both parties fail to comply with the agreement. The terms of the loan contract will differ depending on the type of loan, and which state or federal laws govern the performance obligations required by both parties.
Many loan contracts clearly define how the proceeds are to be used. The form of a loan made for a new home, a vehicle, how to pay off new or old debt, or how binding the terms are, is not made in the law. The loan contract signed is evidence that both the borrower and the lender agree that the funds will be used for a defined reason, how the loan will be repaid and at what rate of amortization. In case the money is not used for the stated reason, it should be immediately refunded to the lender
Reasons for Using Investment Loan Agreements
- An investment loan agreement is considered to be proof that the money that is involved was a loan and not a gift. This may even become an issue with the IRS.
- Loan agreements also turn out to be useful when borrowing or loaning to a family member or any close friend. They help in preventing arguments over terms and conditions.
- An investment loan agreement helps in protecting both sides in case the matter goes to court. It allows the court to analyze whether the conditions and terms are being met or not.
- In case the loan includes interest, the other side may want to involve a table that spells out how the laon will be paid off over time. It also mentions how much interest is involved in each of the payments made.
- Loan agreements also state the exact monthly payment that is due on a loan. It can be said that anytime you borrow or lend money, a legal loan agreement must be a part of the process.
What Does a Loan Agreement Include?
- Loan Amount and Duration: The amount of loan granted to the borrower is specified by a loan agreement, also called the principal amount). The agreement also describes the period the loan is provided for.
- Interest Clause: It also states the interest rate to be paid by the borrower along with the principal. It also establishes the penal interest or additional fees to be paid in case of default on interest and principal payments.
- Repayment Clause: It is the key element in the loan deal. The clause defines how the creditor must repay the loan to the lender, and when. The reimbursement may be a lump sum, or regularly. In the case of periodic payments, the number of installments due should be specified and the date when the installment becomes due.
- Prepayment Clause: Prepayment means early loan payment, i.e. before the due date. Loan prepayment is usually allowed upon the payment of penalty fees. The penalty is imposed to shield the lender from interest payment losses.
- Loan Security: A loan may be guaranteed or unsecured. In the event of a secured loan, some asset, say house or vehicle, is generally pledged as collateral for the loan. In case of default, the security promised can be used to recoup the amount of the loan.