Whenever someone takes a loan from somebody it is done under certain conditions based on the agreement from both the parties. Whenever someone offers loan to somebody, major factors that are considered is rate of interest, time period of loan, principal amount, late fee etc.
Loan Contract Template is basically a document that needs to be filled and signed by the borrower. All the mandatory information needs to be filled in like Name, Address, Guarantors, Income of the person, Property he owns etc. It also contains all the terms and conditions to be followed during the loan period by both the parties.
The terms and condition basically includes all the clauses related to repayment divided under many sections like
- Payments:
This basically tells about the total amount to be paid by the borrower which is calculated based on the interest rate.
- Applications of Payments
This clause basically states about the payments to be done like the borrower need to pay all the interest first and then all the principal amount.
- Late Fee
In this clause if the borrower is not able to pay the premium before due date then there he will be charged a late fee.
- Acceleration of Debit
If any payment obligation under this note is not paid until due date, then the remaining unpaid principal balance and any interest will become the due amount immediately.
It may also contain the clause for prepayment like if the borrower wants to prepay the amount then what are the terms and conditions to be followed like what are going to be the changes in the amount, interest and time period of the loan.
