How Do You Prepare A Loan Contract?
A loan contract is an agreement between two or more parties regarding repayment of money borrowed. This contract most often includes the amount borrowed, interest charged, collateral, and consequences of non-payment or late payment. If prepared correctly, a loan contract can be upheld in a court of law in the event that the borrower defaults. You have the capability to prepare a loan contract yourself, so there is no need to pay outrageous fees to an attorney to do it for you. Preparing a Loan Contract Step 1 Discuss the amount of money that will be borrowed. Talk with the borrower to see how much money they need to borrow. The principal amount, which is the amount borrowed, is a vital part of a loan contract because it is the basis of the amount of interest charged and total repayment. Step 2 Determine the stipulations of the loan. Once you have the amount that will be borrowed, you need to determine the interest rate, total repayment amount, due date of payments, amount of payments,
