A loan agreement is a contract between a lender (which is generally a bank or other financial institution) and a borrower. It contains the terms and conditions laid down by the lender to make a loan available to the borrower. However, it also incorporates the mutual promise made by each party pertaining to the loan.
The clauses and details to consider and mention while drafting a loan agreement includes:
These are some of the key clauses that are generally present in the said agreement.
A personal loan agreement is a contract between a borrower and a lender wherein the lender may vary from banks to other financial institutions to your friends who are willing to loan you money. In a general sense, it consists of the basic clauses stating the amount being borrowed, the time period to pay it back and the interest, fees and penalties if any, are also mentioned.
A mortgage agreement is another type of loan agreement between the lender and the borrower, however, the loan, in this case, is taken to buy a real estate property such as a house. The borrower generally pays back the loan in monthly installments over a set period of time. Mortgage agreements are usually drafted by the bank or other financial institutions for the borrower to review, understand the terms and conditions set, and sign.
On the other hand, the lender sets the terms and conditions in case of a facility agreement. It is a contract between the lender and the borrower wherein the lender may be a bank or other financial institution. The interest rates, repayment period and the amount of money lent are essentially mentioned among other points in the said agreement.
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