Guaranteed Loan – For people with lower credit scores, usually less than 700. The term “secure” means that the borrower must establish guarantees such as a house or a car if the loan is not repaid. It is therefore guaranteed to the lender to receive an asset from the borrower if it is repaid. The insolvency of a loan is a very real scenario, so it is repaid at a later date than the agreed. To do so, you must decide on the acceptable date of the “late payment” and the resulting fees. In the event of a credit default, you must define the consequences, such as the transfer of the guarantee. B or whatever is agreed upon by mutual agreement. Repayment Plan – An overview of the amount of principal and interest on the loan, loan payments, payment maturity and term of the loan. When setting up the loan agreement, you must decide how to repay the loan. This includes the date of repayment of the loan as well as the method of payment. You can choose between monthly payments or a lump sum.

Depending on the loan chosen, a legal contract must be drawn up specifying the terms of the loan agreement, including: depending on the amount of money borrowed, the lender may decide to have the agreement approved in the presence of a notary. This is recommended if the total amount, the capital plus interest, is more than the maximum acceptable rate for the small claims court in the jurisdiction of the parties (usually 5,000 usd or 10,000 USD). A lender can use a loan contract in court to obtain repayment if the borrower does not comply with the contract. The use of a loan agreement protects you as a lender because it legally requires the borrower to repay the loan in regular or lump sum payments. A borrower can also find a loan agreement useful because he spells the details of the loan for his files and helps keep an overview of the payments. I Owe You (IOU) – The acceptance and confirmation of money lent by one (1) party to another. There are usually no details on how or when the money is repaid or lists interest rates, payment penalties, etc. Each personal loan agreement form must contain the following information: In the event of a delay in the loan, the borrower is responsible for all fees, including all legal fees. Regardless of this, the borrower is still responsible for paying principal and interest in the event of default. All you have to do is seize the state in which the loan was taken out.

A loan agreement is the document signed between two parties wishing to enter into a transaction with a loan.