If you intend to borrow money from a commercial entity, you should focus not only on the references of such a company, but above all on the contract itself. Yes, a document that actually defines the relationship between the creditor and the debtor (that is, you). In this respect, you will most often encounter the word loan or credit.
From a legal point of view, however, the correct and therefore appropriate term is a loan that you return, including pre-set interest rates. In order not to step alongside a contract that will not endanger you and get into a debt trap, you have to look at some important elements.
What should the rental contract contain?
The fact that it is a “loan agreement” must be an integral part of such a document. That is, defining the subject to which the following data report. The two most important will undoubtedly be those of both parties to the contract.
- Lender – the person or firm providing the sum
- Debtor – the person who borrows the money and has to repay it
The contract must indicate the amount you are borrowing. This sum is usually called, as principal. Of course, this is related to the respective interest rate in percentages. This amount will be increased by the aforementioned principal, which you must return at the specified due date. With the interest rate, keep an eye on the APR (the most important figure!), Which includes, in addition to interest, any other fees associated with the execution of the contract, the provision of the sum of money and other processes. Thanks to this value you actually know how much you will pay in the finals, which should be stated separately and clearly.
Sets extra cartoons
As part of the upcoming loan agreement, various situations are usually thought of. For example, if you have the option to repay early or in larger amounts, you are allowed to request a deferral or an extension of the due date. These are all actions that are usually charged. If this is the case, it must be stated in the contract.
Other important data
The loan agreement should, to a certain extent, protect not only the borrower but also the lender who wants his money back within the required time. You may find it useful to have additional information and elements to make the contract much more complex.
- Signatures on the contract
- Contract date
- Nature of loan – special purpose / non-purpose
- Penalty fees payable if the due date is not met
An oral contract is also an alternative to this contract. In this respect, however, we recommend giving preference to a standard written contract, which avoids all sorts of complications, eg when submitting some details from the content of the contract.