A credit agreement is a legally binding contract between two parties in which a loan is offered. These agreements detail all the conditions of the loan and the repayment process and are signed by both the Lender and the Borrower. Credit agreements are also often referred to as loan agreements.
This is an official credit agreement between [Lender.FirstName] [Lender.LastName] (hereby known as 'the Lender') and [Borrower.FirstName] [Borrower.LastName] (hereby known as 'the Borrower').
Both parties agree to fulfill the promises and conditions noted in this credit agreement.
This credit agreement template can be used for both individuals and companies. You can amend the Lender and Borrower fields above accordingly and include a company name for any business involved.
Depending on the type of credit you agree to, you will need to choose one of the following options. This template offers options for loans with and without interest.
(Use this option for no-interest credit agreements)
The Lender agrees to loan _________ (total amount of the credit) to the Borrower. The Borrower agrees to repay the total amount in full before _________ (date). This loan will incur no interest.
(Use this option for interest-added credit agreements)
The Lender agrees to loan _________ (total amount of the credit) to the Borrower. The Borrower agrees to repay the total amount in full before _________ , along with any interest incurred on the unpaid monies at the rate of ____% per year, beginning on _________ (date). This interest is calculated yearly, not in advance.
(The rest of this agreement is used for both)
Use the above line to agree on a payment term, such as the 1st of each month.
This loan will be repaid by the Borrower to the Lender in full by __________ (date).
The Borrower agrees to repay the loan through consecutive monthly payments of ________ (total monthly payment). Payments will be taken on ___________ (the day of the monthly payments will be withdrawn).
The Borrower agrees that payments paid over ______ (no. of days) late will be subject to a ________ (monetary amount) late fee.
Start Date of the First Payment: ___________
End Date of the Last Payment: ____________
(Subject to any lump sum payments made by the Borrower)
Loan Amount: ___________
Interest Rate: ___________
Late Fee: _______________
Payment Method: ____________
During this agreement, the Borrower can make additional lump sum payments or pay the loan's outstanding balance to reduce interest or shorten the duration of the loan term. This should be without further bonus or penalty.
All payments should be made to the following account:
Bank Name: _____________
Branch: ________________
Name on Account: _________
Account No: _____________
Sort Code: ______________
Should the Borrower breach the payment clause of this agreement, the Lender can request that the loan's original amount be paid immediately.
Without limitation, the Borrower shall be liable for all expenditure and legal costs incurred while enforcing this agreement in the event of a default.
This agreement is legally binding. The terms of which can only be modified via written communication from both the Borrower and the Lender.
This agreement will be governed by [Lender.State] (corresponding law).
Use this space to state the specific governing body the agreement is under. This may be different for each country or state.
Both parties agree that the terms in this agreement are non-transferable unless written consent is provided.
The Lender and Borrower agree to the conditions set out in this agreement:
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A credit agreement is a contractual agreement detailing a loan between two parties. It’s a legally binding document that details the terms of a loan, including interest rates and payment terms. Credit agreements are sometimes referred to as loan agreements.
To cancel a credit agreement, a written request must be submitted within the first five days of setting up the agreement. Any money or materials that have been provided at this time must be returned. Steps for canceling a credit agreement may differ between companies or even states.
It’s really important to read a credit agreement line by line before signing. Make sure you have clear details about the loan amount, how it should be paid, and where it should be paid to. Check for late payment terms and interest rates, and be sure to check these on your monthly statements.
If there is anything in your loan agreement you’re unsure about, make sure to ask these questions before agreeing to the terms.
When entering a credit agreement, the Borrower is entitled to request details about the agreement at any point. Should the Lender not provide this information within 12 working days of the request, the agreement becomes unenforceable until this information is provided. The number of days the Lender has to respond may differ by state, region or country.
To write a credit agreement, you will need to include the full name and details of both the Borrower and the Lender, along with specifics regarding the amount borrowed and how this loan will be repaid. You should also mention what happens if the Borrower fails to keep up with payments so that everyone has a full understanding of what the agreement entails.
To make things easier, you can use the PandaDoc Credit Agreement template to create a quick and pain-free agreement between yourself and another person or company.
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