Interest only loan agreement template, A loan agreement is the document which represents the proper evidence of a loan. The document also includes important details such as covenants, positive or negative ones, the data on the collateral like loan type and its value, in addition to guarantees, the applicable interest rates, fees, the conditions according to which the loan is to be repaid, and the duration of repayment envisaged.
In conclusion, the loan agreement contains the terms and the conditions that are pointed out so the borrower may draw out a loan. The terms and conditions are set by the lender, which is a bank, or another type of financial institution. In fact, the loan represents a sort of”facility” that is offered by the creditor, and that is why the agreement on the terms under which a loan can be taken out can also be referred to as a facility agreement. The agreement comprises four sections.
The first section comprises the terms that are to be utilised in the document and their definitions.
The second section is concerned with the operational terms relevant to the agreement, which means that it points out the amount to be borrowed, the schedule of its repayment, and the interest on the repayment. The second section of this loan agreement is of particular interest for the financial agents of the debtor.
The next section is devoted to the specifics of the loan transaction; it contains the responsibilities of the borrower and the lender, the steps to be undertaken in the event of the borrower’s inability to repay the loan; there’s also information on the extent to which changes could be made to the arrangement. The third section is drawn up following detailed negotiations between the lender and the borrower.
The final fourth segments contains standard text including details like contract information, the relationships which exist between the finance parties – in case of more than one tender and more than 1 law that apply to this arrangement. Have a look the sample of interest only loan agreement template below at the attachment page.