A simple loan contract includes information about both parties entering into the agreement, where they can be contacted, and how the loan is to be repaid, according to Document Templates. The payments can be scheduled over time or in a lump sum. If payments are not made in cash, the manner in which the payments are to be made should be delineated, such as through the use of a rental property.
Payments also do not have to be scheduled immediately, says Document Templates. They can be scheduled to begin after a few years or in a lump sum after an extended period. Payments can also be provided through giving service to the lender or after a job has been obtained. Loan contracts include a section in which both parties can sign off after the terms of the agreement have been fulfilled. This ensures that there are no legal issues later regarding completion of payment.
Including all the proper information in a loan contract also ensures that there are no questions during the term of the loan about the amount of the loan or the terms of payment, notes Document Templates. Such information protects both parties in the future. Loan contracts, like legal contracts, are flexible enough that clauses can be added to change the terms of the loan as needed.