Personal Loan Contract by mabelstave

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									                 Personal Loan Contract: A Sneak Peek Into it


                                              There may be circumstances where you could do
                                              with some extra financial help when you are
                                              contemplating on buying something expensive.
                                              Personal loans would come in very handy during
                                              such circumstances. The lender of course will
                                              want you to enter into a personal loan contract
                                              which serves as a proof of the terms and
                                              conditions and your agreement upon the same. It
                                              is the contract that binds the lender and the
                                              borrower and also regulates various terms that
are there in the loan.

What would a personal loan contract generally encompass? The contract will clearly state the
names of the people who are involved in the bargain. The parties are identified as creditor and
debtor in the agreement. The principle amount that is borrowed is also entered in the contract.
The rate of interest is clearly mentioned too. The other terms of the personal loan are also
clearly stated in the contract. The debtor has agreed to repay the personal loan in say one
year, two years or three years or five years…it has to be stated clearly in the contract. Another
important factor that needs to be included in the Personal Loan Contract is the purpose for
which the personal loan is being borrowed. How the funds are going to be utilized may also be
stated in the contract.

There may be certain instances where the debtor is able to repay the personal loan before the
borrowing term ends. In such a case, the creditor may levy a penalty for prepayment of the
amount borrowed. This aspect needs a lot of clarity as it involves a certain percentage value
that is charged to the debtor. When all these aspects are included in the contract, it has to be
notarized and signed by the creditor and the debtor with the date written on the contract.

With the way things are going electronic and digital, there are readily available personal loan
agreement templates and loan contract forms too that could be easily downloaded from the
online platform. One needs to ensure that all the matters are included with great precision for it
is monetary dealings in question and anything amiss would mean a whole lot of money for both
the parties. The kind of loan agreement that one enters is decided upon the categorization that
the loan falls under. There are the bilateral loans and syndicated loans where loan agreements
are categorized by lender. There are term loans and revolving loans that are categorized by
type of the facility. Regardless of the type of loan agreed upon it is mandatory to enter into a
personal loan contract that encompasses all the necessary details.

								
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