Money is crucial in everyday life. People will try to get money to meet the living expenses they need. To meet these needs, they sometimes have to borrow money. For those of you who provide loans, you should make a personal loan agreement template.
What Is Loan Agreement?
It is an agreement made when you lend your money to family members, relatives, friends or even neighbours. This agreement has legal force because it includes loan conditions. With this agreement, you will be protected if the borrower’s choice does not return your money. The contents of this personal loan agreement will include complete transactions such as the loan amount, repayment period or even interest on the loan if there is one.
When Does The Loan Agreement need To Be Made?
A loan agreement is necessary when you lend money to someone. You can also use a loan agreement when you borrow money as an agreement if you are going to repay the loan. If the loan requires you to pay interest and you want to prepare an amortisation table, then you make a personal loan agreement as well.
What Should Be Included In Making A Loan Agreement?
A loan agreement form is made to legally bind both parties, namely the lending party and the borrowing party. For the agreement to run smoothly, you need to include the following:
Contact Information Loan Agreement
Having each contact makes it easier for you to communicate so that you can avoid misunderstanding.
Interest Loan Agreement
Not all personal loans bear interest, but if the loan takes interest, you must return the investment along with interest. The borrower can decide how the attention is paid.
Repayment Option Loan Agreement
Loan payments can be made according to the agreement. These payments can be made in one payment or can be paid in instalments during each month within the specified period.
Collateral Loan Agreement
Collateral is usually used to secure the money lent if the borrower is unable to return the loan money. A personal loan usually does not require insurance.
Late Fees Loan Agreement
In making a personal loan agreement, you must determine the maximum payment date. If the borrower is new in paying the loan, there will be a late fee. Late payment terms can also transfer the collateral to be yours.
How To Make Loan Agreement?
The first step is writing the date when you receive the money. Next, you must write a statement of agreement along with the terms and conditions. The agreement also must include a statement of agreement agreed by both parties. The final step is to sign a personal loan agreement, so it becomes legally valid.
If you have difficulty making an agreement template because of your busy schedule, then you can get it on the internet. A personal loan agreement template free can be downloaded in different formats. Interestingly, those templates can be edited so they can be changed as you want. All these conveniences will help you in launching your transaction agreement.