You can also provide information about the initial payment in case the borrower is interested in repaying the loan earlier. Many borrowers are concerned about prepayment and you should include a clause in your loan agreement that talks about prepayment options, if any. If you authorize an advance payment, you will need to provide this information and details if they are allowed to pay the full amount or only a partial amount in advance and if you will charge an advance payment fee if they wish. If you charge a prepayment fee, you will need to indicate the amount. Traditionally, lenders require that a percentage of the principal be paid early before they can pay the remaining balance. If you do not authorize an upfront payment, you must indicate that this is not permitted unless you have given your written authorization to you, the lender. “investment banks” create credit agreements tailored to the needs of the investors whose funds they wish to attract; “Investors” are always sophisticated and accredited bodies that are not subject to bank supervision and the need to live up to public trust. Investment banking activities are supervised by the SEC and its main objective is to determine whether correct or appropriate disclosures are made to the parties providing the funds. Categorizing loan agreements by type of facility usually leads to two main categories: In addition, you should include a section that lists all the information about the guarantor, if you have one. A guarantor is also called a co-signer. This person or company undertakes to repay the loan in the event of default by the borrower. You can add more than one guarantor to the loan agreement, but they must accept all the terms set out in the loan, just like the borrower. Just as you provided the borrower`s information, you must provide the information of each guarantor, and he must sign the agreement.
They must provide their full legal name as well as their full address. If you do not specify a guarantor, you do not need to include this section in the loan agreement. Finally, you must include a section that contains the date and place of signing the agreement. In this section of the loan agreement, you need to provide various information, such as . B the date of entry into force of the contract, the state in which the legal proceedings are to take place and the specific county of that State. This is important because it details when the loan agreement is active and saves you from having to go to another location if there are disputes or non-payments about the contract. Once you have the information about the people involved in the loan agreement, you need to describe the details of the loan, including transaction information, payment information, and interest rate information. In the transaction section, you specify the exact amount due to the lender after the agreement is concluded. The amount does not include interest accrued during the term of the loan.
They will also describe in detail what the borrower receives in exchange for the amount of money they promise to pay to the lender. In the Payment section, you specify how the loan amount will be repaid, the frequency of payments (e.B. monthly payments, due on request, a lump sum, etc.) and information on acceptable payment methods (para. B cash, credit card, money order, bank transfer, debit payments, etc.). You must specify exactly what you accept as a means of payment so that there is no doubt about the authorized payment methods. When executing your loan agreement, you might be interested in a notary notary notarying it once all parties have signed, or you may want to involve witnesses. The advantage of involving a notary is that it helps to prove the validity of the deed in case it is contested. Having a witness is an alternative to notarizing the document if you do not have access to a notary; However, if possible, you should always try to include both. For more information about signing and closing credit transactions and the tasks typically performed by lawyers during this period, see Practice Note: Signing and Closing Credit Transactions. Loan agreements, like any contract, reflect an “offer”, “acceptance of offer”, “consideration” and can only include “legal” situations (a term loan agreement that involves the sale of heroin drugs is not “legal”). Credit agreements are documented by their letters of commitment, agreements reflecting agreements between the parties involved, a promissory note and a guarantee agreement (e.g.
B, a mortgage or personal guarantee). Loan contracts offered by regulated banks differ from those offered by financial corporations in that banks receive a “bank charter” that is granted as a lien and includes “public trust.” (ii) Any bank, institution, company, corporation, trade union or association described in section 1.7(b)(1)(B) of the Act, but only with respect to loans discounted or pledged in accordance with section 1.7(b)(1) of the Act. 3. A loan to a farmer, rancher or producer or harvester of aquatic products for agricultural or aquatic purposes and other credit needs of the borrower, including financing for basic processing and marketing directly related to the activities of the borrower and those of other eligible farmers, breeders and producers or harvesters of aquatic products. . . .