Loan agreement - what should it contain?

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Each loan shall be granted on the basis of a written agreement, the validity of which shall depend on the points contained therein. Such a document should clearly identify the parties to the transaction - the lender and the borrower. An important element of the loan agreement is also the definition of its subject matter, duration and repayment date.

Whatever the object of the loan and whoever the person granting it, a contract must be drawn up that clearly defines all the conditions. This is also important in the case of loans from relatives or friends.

Basic elements of the loan agreement

Quick loans have more and more supporters - mainly due to the form of concluding a contract via the Internet and instant payment of money to the account. Before the transfer is made, an agreement is concluded which is usually sent by the lender by e-mail. Such a document should contain, first of all:

• parties to the agreement - the lender and the borrower. It is important that the data from the ID card should be included here, i.e.: name and surname, registered address, PESEL identification number and series and number of the ID card. In addition, this point should include the NIP, KRS and REGON of the loan institution,
• a description of the subject matter of the contract, the amount of the loan and the duration and the system of its repayment,
• additional costs of the loan - interest, commission, insurance, preparatory and operating fee,
• rules of loan repayment - it can be done in installments or in the form of a one-time payment to the borrower's account on a specified date. Also important is the form of payment, e.g. a personal refund or transfer of money to a bank account.

Content of the loan agreement - Additional points

Depending on the entity granting the loan, the following points may also be included in its contract:

• a form of securing the repayment of a loan - it can be, for example, a bill of exchange or a guarantee by a third party. Sometimes it is sufficient to buy a loan insurance,
• conditions of early repayment of a loan - this point most often determines the amount of recovering previously incurred costs in case of early repayment of a financial liability,
• extension of the loan - this point specifies the conditions for extension, as well as the amount of additional costs in the event of deciding on such a step,
• consequences of breach of contract - this applies in particular to late repayment of a loan,
• the conditions for withdrawal - both in the event of default by the borrower and the lender,
• signatures of the parties to the contract - they constitute acceptance of the terms and conditions of the contract.

Loan agreement - model

As a rule, lending institutions prepare a contract on the basis of a scheme, which makes it clear and transparent to the borrower and makes it much easier to understand. Before signing the agreement, please read the agreement and explain any inaccuracies to the lender.