A personal loan agreement is an important and formal contract evidencing borrowing and additional terms agreed between a Borrower and a Lender.
The personal loan agreement is protection for the Borrower as well as the Lender, ensuring that both comply with the common law in the process. It can include repayment details, warranties given by the borrower, obligations and restrictions on the Borrower, as well as how to end the loan agreement.
What is a loan agreement?
A Loan Agreement is used to document and set out the terms of a loan between individuals, between corporations, or between an individual and a corporation.
Who is the Borrower?
The Borrower is the person or corporation that receives value (money, property or some service) from the Lender on the condition that the Borrower will pay the principal amount plus any interest to the Lender at sometime in the future.
Who is the Lender?
The Lender is the person or corporation that gives something of value (money, property or some service) to the Borrower on condition that the Lender will be paid a certain amount in the future.
What is the Principle Amount?
The principal is the original amount of the loan that is owed by the Borrower to the Lender on the date the Loan Agreement is signed. Once the Borrower has begun to pay back the loan, the principal refers to the amount of money still owing to the Lender at any given moment in time.
What is the Term?
The Term is the time length of the loan agreement. At the end of the term, the Borrower must repay the outstanding balance of the loan.
Whether you are lending money to someone or from someone, we can help you understand the risks and tailor a document exactly suited to your needs.
For a comprehensive, caring and professional service, contact Premier Direct Law today.