Loan agreement

Loan agreements can be understood as contracts that are signed between the lender and the borrower before the former ushers out any finances. Loan agreements are legal documents that protect both parties until the borrower has paid up. There are different types of loan agreements and they are not limited to working capital loans, revolvers, facility agreements and many more. Financial institutions such as banks, building societies and credit unions are responsible for offering people loans.

Before you get a loan, it is of paramount importance that you read the contract carefully before putting a signature because failure to do so may lead to complications in future. For instance, when you just sign the contract without reading the interest rate to be paid can lead to problems when you realise that it is more than what you can afford. Loan agreement also allows the borrower to take legal action if the lender is demanding more than what have been agreed on the contact.

Loan agreements can be secured loans whereby the borrower agrees to let the lender possess some of his or her property worth the borrowed money after the failure of paying back. Loan agreement forms can be completed online for people applying using the internet or they can be individually completed on hard copies. One thing to note about loan agreements is that the terms are determined by the lender not the other way round.

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