Loan Agreement Template - Free Sample
Agreement Template Loan Agreement Template
Loan Agreement Template

Loan agreement template is a contract that regulate the terms of a loan. A sample loan agreement can help both lenders and borrowers to format a loan agreement terms.

Loan Agreement Overview

Business and individuals often need to apply to banks or financial institutions for business loans or personal loans. There are various types of loans you can consider, cash credit is the primary method in which banks lend money against the security of commodities and debt. It runs like a current account except that the money that can be withdrawn from this account is not restricted to the amount deposited in the account. Instead, the account holder is permitted to withdraw a certain sum called "limit", "credit facility" in excess of the amount deposited in the account. Working capital loans are a common forms of commercial loans, firms need cash to pay for all their day-to-day activities. They have to pay wages, pay for raw materials, pay bills and so on. The money available to them to do this is known as the firm's working capital. The main sources of working capital are the current assets as these are the short-term assets that the firm can use to generate cash.

Bank overdraft is another common form of business or personal loan. The bank overdraft means that the account holder withdraws more money from a Bank Account than has been deposited in it. An overdraft occurs when withdrawals from a bank account exceed the available balance which gives the account a negative balance. If there is a prior agreement with the account provider for an overdraft protection plan, and the amount overdrawn is within this authorised overdraft, then interest is normally charged at the agreed rate. If the balance exceeds the agreed terms, then fees may be charged and higher interest rate might apply

Loan Agreement Template

There are free loan agreement templates you can download for reference. Alternatively, you can use common software such as Word to create your own loan agreement template. In the process of designing a customized loan contract template, you need to consider the loan contract form, loan agreement format and key elements for your template.

The first key part in loan agreement template is loan related information. In the section, you may include: The __ agrees, subject to the terms and conditions set forth herein, to make a loan to Borrowers for ___ the principal amount of ___, The Loan will be used exclusively for the ___, Borrowers agrees that all funds disbursed hereunder will be used only for the ___ and such funds will not be used in any other manner or for any other purpose whatsoever.

The second key part in loan agreement sample is repayment of loans and loan interest. In the unit, you may include: The loan interest rate is base on____ to the benchmark interest rate, the yearly executing rate is ____% until the loan falls due. All the loan of this contract will base on ______(month/season)to do the interest settlement, the interest settlement day is the 20th of every______(month/last month of every season). The borrower must pay the interest on every interest settlement day. If the last loan principal pay back day is not the interest settlement day, then the unpaid interest needs to be paid with principal together.

The third key part in loan agreement example is rights and obligations of both lender and borrower. In the section, you may include: The lender has the right to understand the status of production management, financial activities, material inventory, and the loan using, it can demand the borrower to periodically provide the financial statement and such kind of document, data and information, Pay off the principal and interest on time. If the borrower needs to roll over, it needs to send the written application to the lender 15 days prior to the loan falls due, after the lender agreed, and then sign the loan roll over agreement.

 
 

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