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A loan agreement is used to record the terms on which money has been lent by one person to another.
Our loan agreement allows you to record the terms on which a loan has been made in comprehensive detail. Issues addressed by the agreement include the details of the parties, the repayment terms of the loan, interest on the loan (if any), the circumstances in which the loan will become immediately repayable, security for repayment and the protection of the lender against a default in repayment. The agreement also takes account of the National Credit Act and ensures compliance with its provisions.
A comprehensive loan agreement ensures that the lender has maximum protection against non-payment and that the borrower is clear about its obligations. In this way, disputes are avoided. Even if a dispute does arise, the agreement provides cost-effective and meaningful remedies to enforce the terms of the loan agreement. In other words, this is an essential agreement for anyone intending to lend money.
Full details of the contract:
The drafting process utilized for the loan agreement includes the following capabilities:
It is first ascertained whether or not the transaction concerned falls within the ambit of the National Credit Act.
If the National Credit Act applies, a comprehensive reformulation of the terms of the loan agreement is completed in order to ensure compliance with the Act.
The agreement provides for both a loan and an ongoing credit facility.
The amount of the loan or facility is specified (all currencies are catered for), as is the time, place and manner in which the loan amount(s) will be advanced.
Any security to be provided for the loan is catered for (e.g. deeds of suretyship, asset pledges and notarial bonds).
The loan agreement caters for up to 15 creditors and up to 15 debtors.
Full details of every party signing the loan agreement are inserted, including full names, identity or passport numbers, addresses, contact numbers and email.
Corporate entities are fully catered for, including private and public companies, close corporations, trusts, partnerships, sole proprietorships and registered or unregistered voluntary associations.
In the event of a corporate entity being a party to the loan agreement, provision is made for the full identification of the entity’s representative and protection against insolvency or potential insolvency is catered for.
The repayment terms of the debt will be incorporated, including the due date(s) for repayment, the amount and number of any instalments, the method and place of payment, the dates on which any instalments will be payable, and the circumstances in which immediate repayment will be required.
Comprehensive terms relating to the payment of interest can be included, including the rate of ordinary and penalty interest, the regularity with which interest will be compounded and paid, the total interest payable, and the circumstances in which interest rates may be varied.
The obligations and warranties of the borrower and the protection afforded to the lender pending the repayment of the loan are addressed in detail.
Provision is made for the delivery of statements of account, if required, and for the allocation of payments.
Early repayment is catered for, as is the potential for early repayment penalties.
Conduct amounted to a breach of the loan agreement is clearly delineated and the consequences of a breach are canvassed in full – including remedies (both under the common law and the National Credit Act), legal costs, court jurisdiction and the legitimate exclusion of certain defences and exceptions.
The contents and terms of each loan agreement are dependent on the responses given during the online interview process. As a result, the above list constitutes a broad overview of the issues typically addressed in the document and is not intended to be comprehensive.