A loan agreement should contain the loan terms, personal details of the borrower and lender, and a solution to ensure compensation for the loan in case the borrower fails to repay the loan, according to the Houston Chronicle. To ensure that the agreement does not result in negative consequences such as obligation to arbitration clauses, it's best to seek the advice of an attorney before drafting the agreement.Continue Reading
The loan agreement terms include the loan amount the that the borrower receives from the lender, the interest rate on the loan, any collateral that the borrower offers as a guarantee for loan repayment and the time frame within which the borrower should clear the loan repayment, notes the Houston Chronicle. For clarity purposes, it is advisable to write the loan amount in both figures and in words. The personal details of the borrower and lender include their contacts and names.
One way to draft a loan agreement is to download a loan agreement template from the Internet, states the Houston Chronicle. As of 2015, websites offering loan agreement templates include LoanBack.com and ContractStore.com. The basic loan agreement templates include repayment terms and interest rates, and users can edit the templates to suit specific agreement situations.Learn more about Credit & Lending