Loan contracts are the agreements that should be followed by a lender and a borrower. There are different kinds of loan contracts which vary on the purpose and usage of the loan, the conditions that are included in the loan agreement and the type of loan that an entity applied for.
Contract writing is easier if you already have a guide in creating the particular legal contract that is usable for the transaction you will be involved in. This article contains a variety of loan contract templates and samples which you may all download and use as references in creating the specified document.
Printable Business Loan Contract Template
How to Write an Effective Loan Contract
It is similar to a service contract in that a loan contract specifies the amount that needs to be paid.
Writing a loan contract and any other contract that requires the listing of items to be given to clients in exchange of a monetary value (like a sales contract) can be a tedious job. They needs to be accurate, complete, and understandable.
You can write an effective loan contract by following these items:
- Be specific with the kind of loan involved in the transaction. Specify the loan description and the purpose for which it is intended.
- You need to be very precise in discussing the items in a loan contract. Precision allows you to veer away from providing misleading information.
- Make sure to have legal consultations to ensure the loan contract you create is just and fair.
- Ensure that you put the complete amount of the loan and the interest that is involved in the transaction.
- You should input the repayment option that a client will select to assure that the repayment plan is organized.
- Provide the due dates in which loan repayments should already be done.
- List down information about the terms and conditions for the late fees, collateral, usage of cosigner, loan sales and other details that may be included in a particular money lending transaction.
Inclusions of a Loan Contract
A loan contract, may it be a personal loan or a vehicle loan, should have all the details that all the parties involved in the transaction should be aware of. The important items that should always be seen in any specific loan contracts are as follows:
- The specification of the kind of loan where the contract will be used
- The name of the lender and the borrower
- The amount of money that the borrower is asking for
- The date where the loan will be furnished
- The date that the contract has been made, reviewed and/or signed
- The conditions of the loan including the repayment dates and the terms for repayment failure
- A signature and seal of the entity that served as the grounds for the contract to legally materialize.
Be aware of the selection of the contract templates that you would like to choose from in creating a loan contract as there are different kinds of loans that you can apply for. Make sure to select the appropriate template for the loan transaction that you will be involved in.