Form for Loan Agreement for Both Borrower and Lender
Giving a loan to someone can be very risky, that’s why you’re going to need a form for loan agreement. Using an agreement before giving a loan ensures that you’ll get the money back or at least some kind of compensation when something bad happens. It’s not wise to give a loan without it, even if you’re giving a loan to one of your friends.
In this article, we’re releasing our templates of the agreement for free. Anyone can download our templates for free and without any hassles. Simply download, edit if necessary and print the templates that you want. Simple as that, and in this article, we’re going to talk a little bit about loan agreement or also known as a loan note.
Loans Notes and Its Definition
A loan note is a formal form of saying that someone owes you money. The document has to be given to all the parties involved. It enables the borrower to receive payments from the lender, and if possible, with an interest rate attached to it over a period of time and ending on the date at which the entire loan is to be repaid.
A proper form for loan agreement usually states the legal obligations of the lender and the borrower, including a set of contractual penalties, the right to sue or seek arbitration or compensation if either party involved in the contract fails to meet or otherwise defaults on financial obligations.
The way loan note works is that it’s considered a legally binding agreement for all parties and with all the parties considered fully committed to the terms written in the contract. A loan note can be written by either borrow or lender, but it’s more common to be written by the lender as they’re the one providing the money. The note will always be valid until the amount listed on the document is fully paid by the borrower, this includes the interest if there is any. Also, a loan note can help the parties to avoid an undue tax hit caused by a lump-sum payment from a settlement or cash-out.
Some important information such as: names and contact information of both parties, principal balance, interest and deadline are most common in loan notes. For a better understanding on a proper loan note, check below to see our template of form for loan agreement that you can use.