In a Loan Agreement, the borrower and the lender lay down the general conditions for the loan. Among other things, the loan amount, term, instalment, repayment method and default charges in the event of late payment are specified here.
In addition, the rights and obligations of the borrower and the lender are laid down. With the contract, the lender undertakes to pay out the agreed amount. The borrower, for his part, undertakes to repay the amount plus interest within the agreed time.
Form of the contract
There is no prescribed form for a loan agreement, but some points should be set out in writing so that the essential elements of the loan can be evidenced: