What do the terms of the loan agreement


Key points of the loan agreement

The first item of the loan agreement (“the subject of the contract”) includes basic information about the loan - its size, maturity and interest rate. This item also contains information about the bank details and personal data of the borrower. If a special purpose loan is issued, then the credit agreement necessarily specifies what the loan funds should be directed to, and if necessary, the borrower must, upon request, document the intended use of the loan received.

The next section, which is present in all bank loan agreements, concerns the procedure for issuing and repaying a loan. In this paragraph, you can find information about the amount of monthly payments, the sequence of debiting funds, bank fees, payment terms, the procedure for partial and full early repayment of debt. In the same section, the bank warns of the consequences in case of delayed payments on the loan and the amount of fines for delay.

Rights and obligations of the parties

These two points of the loan agreement indicate the mutual obligations of the creditor and the debtor. The borrower undertakes to make timely payments on the loan, to report on changes in personal data (change of name, registration, change of passport, change of mobile phone number, etc.). The bank, in turn, undertakes to write off funds on time to repay the loan, provide a modified payment schedule, notify in advance of any changes and transfer loan information to the credit bureau.

It is worth noting that the rights of a credit institution are much more than duties. Thus, a bank has the right to unilaterally change the terms of a loan agreement, transfer debt on a loan to third parties (sell a debt to a collection agency), charge fines, demand early repayment of a loan, etc.

The customer information contained in the contract can be used by the bank to advertise its services in the form of SMS messages. However, the client has the right to refuse such distribution.

In the loan agreement can meet another section that relates to collateral. If the collateral for a loan is any property, the borrower is obliged to monitor its safety and not sell it without the consent of the bank.If the guarantee of a physical person acts as security for a bank loan, then the loan agreement always contains a clause stipulating the obligations, rights and liability of the surety.

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