There are different forms of credit methods used by organizations to full fill their monetary needs and requirements. A company may be big or small but the need for monetary funds can arise for anyone anytime. To overcome the loss or deficit of funds a company or an individual can opt for a loan.
What is a loan?
A loan is a specific amount of money that is provided to a party called debtor by another party called the creditor in return for some interest rate. The time period for the back of the loan is mostly pre-decided. A loan can be of different types and may be utilized to fulfill different needs and requirements of the debtor.
What is a Loan Contract?
A loan contract is a formal written agreement between the debtor and the creditor in which the creditor agrees to provide a specific amount of money to the debtor who will return this amount along with a sum of interest payment at a specified time period. The loan contract template will contain all the terms and condition of the loan agreement and will safeguard the interests and rights of both the parties concerned. In some cases, there might also be a collateral offered as a security by the debtor. If any of the parties will default from their obligations the case may be taken to court and request legal proceedings against the breaching party. It is a contract that is enforceable by law.
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