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Loan Agreement Template: What Needs to Be Included
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Are you a banker or member of some other type of lending institution in search of a quality loan agreement template—one that includes all of the required elements to ensure the document is legally binding? Have you checked out the vast array of free loan agreement templates that are currently available on many online websites? If not, the following information may be quite helpful. In this article we will not only define the loan agreement template, but we’ll show you what to include on a simple loan agreement and point out the many different types of agreements that are currently available.
Loan Agreement Template Defined
What exactly is a loan agreement template? In simple terms, it is a type of sample loan agreement, one that has been intentionally left blank so it can be used by others. It includes all of the necessary categories and can be adapted for many different types of loans. It contains the required legal language that defines the scope of the agreement and the consequences a lender can take against a borrower in the event of default. And at the bottom of the document, the loan agreement template provides the appropriate signature spaces, including one for the borrower, lender, and one or two witnesses (depending on the type of loan).
More about the Sample Loan Agreement
In today’s struggling economic climate there are millions of people who have turned to a variety of loan types, ranging from home and automobile loans to student loans and a personal loan agreement. Most people who apply for and secure these loans are hard-working and honest people, but despite this, banks and lending institutions must still protect themselves against the possibility of default. This, in essence, is the purpose of the loan agreement and where a loan agreement template can come in very handy.
A simple loan agreement form is a preformatted document on which you can enter the various details of the loan, including the amount and the loan structure (how and when the loan will be repaid). The main purpose of this form is to protect both the lender and the borrower, which is why it should always include language as to how each can seek legal recourse should the transaction fail in some way, either because the item or items secured through the loan were defective or misrepresented, or because the borrower failed to make the required payments or neglected to provide those payments in accordance with the agreement.
Loan Agreement Template: What Types of Free Loan Agreement Templates Are Available?
Whether you’re searching for a simple loan agreement form—a form used to buy a specific item or items on credit—a personal loan agreement—one typically utilized when lending cash to an individual—or any other type of free loan agreement templates for any other purpose, you can bet that the Internet has exactly what you need. Over the years, and as the Internet has become more widespread, there have been many business-related-help websites developed for the web. These sites offer a full range of services and products, including many that offer a wide selection of business forms and templates, each designed to simplify the process of lending and borrowing money. Below is just a small sample of the many free loan agreement templates currently available on these sites:
• Personal Loan Agreement. Personal loan agreement templates are used primarily to set up small to medium-sized cash-loan transactions. In some cases, collateral, such as a home, vehicle or furniture, will be needed to guarantee the loan, but more often than not, personal loans like these are secured with nothing more than a person’s good credit and payment history.
• Vehicle Loans. A loan agreement template can be used when selling a new or used vehicle. Among other pieces of information, these loan documents will outline the final selling price of the car or truck, the monthly payment amount and the date when that payment is due, total number of payments and estimated pay-off date. It will also outline the consequences for missing payments or defaulting on the loan, consequences that can include late fees and/or repossession of the vehicle.
• Home Loans. Whether you’re a realtor or just a person who is planning to sell your home privately, the World Wide Web has become a fantastic medium for obtaining home loan documents. Unlike the reams of paper that formerly accompanied these types of loans, there are now websites that offer a very streamlined version, with which both you and the buyer can conduct the entire transaction electronically.
What to Include on a Simple Loan Agreement Form
Whether you’re planning to borrow a loan agreement template online or create your own using a spreadsheet or word-processing program, there are several items you will need to address on the document, including:
- Name, address and contact information for the lender and the borrower
- Total principal amount to be borrowed
- Interest—and how that interest will be calculated
- Monthly payment amount
- Monthly payment date
- Total number of payments (if not paid off early)
- Total amount paid (if not paid off early)
- Legal stipulations
- Signature spaces for borrower, lender and at least one witness
Rather than creating your own loan agreement from scratch, which can be difficult and time consuming, and rather than hiring an accountant or an attorney to do it for you, which can be very expensive, you may want to consider borrowing a loan agreement template from an online source. This can save you both time and money, however, if you choose this strategy, be sure to look the document over carefully to make sure it’s suitable for the type of loan you are setting up and appropriate for the area in which you live.
Useful Articles
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• How does a loan agreement work?