To create a payment agreement, include the current date, the amount of money involved, the terms of the repayment and the personal signatures of the lender and borrower. It is wise to have witnesses present as well.
- Gather supplies and information
A non-erasable pen and a blank piece of paper are the starting point for creating an agreement form. Pertinent personal information is also necessary for creating an adequate agreement.
- Determine the terms of the payment agreement
The terms of the loan should be clearly stated on the agreement form. Terms include the total amount of money borrowed, the amount of money that should be repaid with each payment and any interest fees charged until the loan is paid in full.
- Write down the correct dates on the form
A payment agreement form must have accurate dates in order to be legally binding. The date the contract is signed and any dates included as payment deadlines must be correct. Double check all dates on the form in order to ensure the ultimate effectiveness of the agreement.
- Write out a statement of agreement
A payment agreement form should include the following statement right before the signatures of the lender and borrower: "The lender and the borrower both agree to the terms of repayment as listed above."
- Obtain the permanent signature of both parties
The lender and the borrower must sign the payment agreement form in permanent ink in order for the contract to be enforceable in a court of law. In addition, it is beneficial to also have one or two witnesses sign the payment form when the agreement is made.