The loan agreement usually appears wherever money is borrowed for any purpose. This document regulates all issues relevant to a given lender and borrower: financing conditions, repayment date, or consequences of arrears in settling the debt. Therefore, it is good to know what such a document looks like and which elements should be given special attention.
Loan agreement – statutory definition
Pursuant to the provisions of the Civil Code, the money lender undertakes to transfer the fixed amount of funds to the user of the property through a loan agreement. These – the user is obliged to return under certain conditions. In other words, if you conclude a loan agreement, the acquired funds will become your property. You will be able to publish them in any way you like. After some time, however, you will have to make an appropriate refund. Debt repayment can be one-off or can be done systematically in agreed parts.
In practice, in order to be able to take out a loan in a safe and profitable way, whether from a private person or a loan company, you should be well prepared for it. The following guide for borrowers will help you with this.
Types of loan agreements – the loan is uneven
The structure of the loan agreement varies depending on the type of financial product as well as the details of the offer. Banks and loan companies offer cash loans that range from several hundred to several dozen thousand zlotys and have a repayment deadline of several to several dozen months.
Banks provide additional mortgage loans, while the non-bank sector: short-term payday loans and revolving loans (similar to the credit limit).
Due to this diversity of loan instruments and the large number of financial institutions, individual loan agreements may differ significantly. On the other hand, each of them is prepared according to a similar scheme and should contain a specific set of elements.
What does a correctly drawn up loan agreement look like?
Regardless of which loan product you are talking about, a properly drawn up loan agreement should contain such elements as:
- date and place of the loan agreement;
- indication of parties to the contract;
- loan amount and currency;
- conditions for repayment of the loan and its costs;
- determining any repayment security;
- costs related to the loan;
- rules for possible extension of the repayment date;
- consequences of non-payment or late payment;
- conditions for terminating the contract;
- signatures of the parties to the contract.