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27th September
2021
written by Tellus

Once you have the information about the people involved in the credit agreement, you need to describe the particularities surrounding the loan, including transaction information, payment information, and interest rate information. In the transaction section, you indicate the exact amount due to the lender as soon as the contract has been executed. The amount does not include interest incurred during the term of the loan. They also describe in detail what the borrower receives in return for this amount of money he promises to pay to the lender. In the Payment section, you describe how the credit amount is refunded, the frequency of payments (e.g..B monthly payments, on-demand payments, a flat rate, etc.), and information about the payment methods allowed (e.g. B cash, credit card, payment order, bank transfer, direct debit, etc.). You must contain exactly what you accept as a means of payment, so that there are no questions about the authorized payment methods. Has a friend, relative or colleague borrowed money from you? Read our article in which you outline smart strategies that will help you get your money back. Interest is a way for the lender to calculate money for the loan and offset the risk associated with the transaction. A credit agreement is a legal agreement between a lender and a borrower that defines the terms of a loan. A model credit agreement allows lenders and borrowers to agree on the amount of credit, interest and repayment plan.

Borrower – The person or company that receives money from the lender, who then has to repay the money under the terms of the loan agreement. Using a credit agreement protects you as a lender, as it legally imposes the borrower`s commitment to repay the loan in regular payments or lump sum. A borrower may also find a credit agreement useful because it determines the loan details for its records and helps track payments. If you`re trying to figure out if you need a credit agreement, it`s always best to be on the safe side and make one. If it is a significant amount of money that will be refunded to you, as agreed by both parties, then your time is worth taking the extra steps to ensure that the refund is made. A credit agreement must protect you, that is, in case of doubt, create a credit agreement and ensure that you are protected no matter what. . .

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