Collateral – A valuable object, such as a home, is used as insurance to protect the lender if the borrower cannot repay the loan. A person or organization that practices predatory loans by calculating high interest rates (known as the “credit shark”). Each state has its own interest rate limits (called the “usury rate”) and usurers illegally calculate higher than the maximum allowable rate, although not all credit sharks practice illegally, but instead fraudulently calculate the highest interest rate, which is legal under the law. Unlike commercial or auto loans, whose conditions dictate how funds can be spent, personal credit money can be used by the borrower for any purpose. 2. Interest rate. The parties agree that the interest rate on this loan is ____%, which is accrued monthly. Credit guarantee (personal) – If someone does not have enough credit to lend money, this form also allows someone else to answer if the debt is not paid. Interest calculated on a loan is regulated by the home state and is governed by the state`s laws on usury rates. The rate of usury of each state varies, so it is important to know the interest rate before calculating an interest rate to the borrower. In this example, our loan comes from New York State, which has a maximum wear rate of 16% that we will use. If you still haven`t seen the $200 you lent Uncle Fred in 1995, it`s time to change the way you lend money. Protect both borrowers and lenders with our free credit agreement template! Simply fill out the attached credit agreement form to carefully document the credit amount, interest rate, contract details and terms, and our presentation immediately converts the information into professional PDF documents.
Download or print PDFs to track credit repayments or automatically email them to borrowers to receive their documents. If a disagreement subsequently arises, a simple agreement serves as evidence for a neutral third party such as a judge who can assist in the application of the treaty. For more information, read our article on the differences between the three most common forms of credit and choose who is right for you. The lender can be a bank, a financial institution or an individual – the credit agreement is legally binding in both cases. The personal loan form is a legal document signed by two people ready to enter into a credit transaction. This loan form document provides written proof of the general conditions of sale between the two people, namely: The lender and the borrower, closes. Renewal Contract (Loan) – Extends the maturity date of the loan. Relying solely on a verbal promise is often a recipe for a person who gets the short end of the stick.
If repayment terms are complicated, a written agreement allows both parties to clearly specify the terms of payment in instalments and the exact amount of interest due.. . . .