Unsecured: An uninsured loan is a loan that is issued without collateral. This type of loan is usually more common when the money is lent to friends or family members. An uninsured loan may have higher interest rates to offset the risks to the lender for the unsecured money loan. Secured: A secured loan is a loan that is issued and backed by guarantees that can be used in the event that the borrower can no longer make payments. Collateral is usually a physical asset that can be confiscated and/or sold by the lender to pay off the loan balance. Warranties can be a car, a house, stocks or bonds. This contract sets out the amount of the loan, any interest charges, the repayment plan and the payment dates. A written contract gives the borrower and lender a clear overview of the terms of the loan. Like any legally binding agreement, a credit agreement has certain terminologies that are scattered throughout the treaty.

These terms have their own purpose in the credit agreement and it is therefore important to understand the meaning of these terms in the design or use of a credit agreement. For those who do not have a good credit history or if you do not entrust them with your money, because they have a higher risk of default, a co-signer is brought into the credit agreement. A co-signer undertakes to take charge of the payment of the credit in case of delay of the borrower. Credit agreements usually contain information about: a credit agreement can be secured or unsecured. A credit agreement is essential, no matter to whom it is granted. Even if the credit is given to a friend or family member, it is still better to have a credit agreement. It serves as a legal document favorable to the settlement of disputes that may arise later between the borrower and the lender. If the loan is for a large amount, it is important that you update your last wish to indicate how you want to manage the outstanding loan after your death. Defaulting on a loan is a very real scenario, as is repayment at a later date than the agreed one. To do this, you must opt for the pleasant “late payment date” and the related fees.

In case of credit default, you need to define the consequences, for example. B the transfer of title to the security rights or anything by mutual agreement. When drafting the credit agreement, you need to decide how the credit should be repaid. These include the date of repayment of the loan, as well as the method of payment. You can choose between monthly payments or a package. A credit agreement is a contract between the borrower and the lender that sets the conditions for granting the loan to the borrower. A loan can be taken out by a lending institution, friends, family members, etc. For more information, read our article on the differences between the three most common forms of credit and choose who is right for you. A credit agreement is a written agreement between two parties – a lender and a borrower – that can be imposed in court if one party does not maintain the end of the agreement. CONSIDERING the granting of loans to the borrower and the borrower who will repay the loan to the lender and the borrower who will repay the loan to the lender, both parties undertake to respect, respect and respect the commitments and conditions set out in this agreement: the correct dismissal of an employee is a difficult but essential part of the activity. Do it right with our free downloadable cancellation template (Word .doc) For private loans, it may be even more important to use a credit agreement..