A loan contract regulates the terms of a loan and we have added here sample loan contract template for you. A loan is a temporary lending of money to a debtor who is required to repay the same along with a certain rate of interest to the lender or creditor. The repayments can be made according to repayment schedules spread over a period of time or in a single installment. Interest is charged by the creditor to compensate for the credit granted by him to the debtor. Loan contracts should be in written form in order to confirm both the parties to the loan arrive at a consensus regarding the rate of interest, repayment of loan and loan period. we hope that this Loan Contract Template will be of much use to you.
A loan will generally be guaranteed by a person known as surety or guarantor who is required to repay the loan in case of default from the side of the debtor. Lenders generally grant loans based on some tangible security like land and building, freehold premises, plant and machinery, etc the resale value of which would be sufficient to cover the loan amount in case of default by the debtor. After the expiry of the loan period and on repayment of the loan amount with interest the rights and obligations of both the parties are extinguished and the loan contract becomes null or invalid.
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