Ideal Creation of a Loan Agreement Template

There are different ways for each individual or organization to create a loan agreement template. Ideally, the document is drawn up in front of a lawyer to ensure that the document contains valid details, terms, and conditions. Since it is not an accessible method for most people, you can draft your own loan agreement by following basic instructions on how to create one. Be advised though, that the structure of the details should be carefully considered not only the conditions themselves. This type of contract is deemed valid in court once signed so can therefore be a liability on your end if you cannot carry out the responsibility stated in the agreement.

Indeed, the world is within your reach nowadays. You can get anything and everything at a click of a button. Going into the internet provides you with the data you need without spending so much effort. You can surely obtain a loan agreement template from the World Wide Web. There are certain points, however, that you need to check before you formally use the document.

The following are points to include in the loan agreement you are drafting:
- Interest rate, if any
- Mode of payment of loan
- Schedule of payment if instalment method
- Due date of payment or instalment schedule
- Late fees and penalties when payment is delayed


There are cases wherein the loan agreement template was not drafted according to these agreements that the parties have made. Sometimes, these points are not included altogether. It is helpful to see the scheduled amount and date for referral of both lender and borrower. There would be no need for reminders or arguments over payments and late fees, for example.



Basic information you will find in a loan agreement template are the full names of both parties involved in the loan, their addresses, names of witnesses, and the lawyer who notarized the document. Terms and conditions should be specified in detail aside from the basic information since this is the area that both parties should abide by.

Secondary information may include the amount loaned, mode of payment, amount of scheduled payment if paid through instalments, due date for payment or scheduled payment. The document should also plainly state if there is any interest rate on top of the loanable amount. It is better to include a computation of payable amount with interest so that questions regarding the aspect can be resolved if conflicts come up. If details of computation pertain to amount of instalment payments, it is also good to include the computation for total amount to be paid with the interest.

Finally, penalties and other charges should be clearly stated in the document so that there will be guidelines on what needs to be done when the borrower fails to deliver his or her responsibilities.

Although these information or points seem pretty straightforward and memorable, oftentimes common individuals fail to include all data in their loan agreement template. It is best to take note of this guide so that you will have a solid contract to present to legal authorities if need be.

Share:


About the Author

Gerri Mason

Gerri Mason is an author of diverse legal documentation. Due to his extensive research and work experience, he is able to share his in-depth... (show bio)