Loan Contract Between Friends
Loan Contract Between Friends
This Loan Contract (the "Contract") dated this [DATE] is between [Your Name] residing at [Your Address] (the "Lender") and [Friend's Name] residing at [Friend's Address] (the "Borrower").
1. LOAN AMOUNT
The party who is acting as the Lender has given their agreement and signaled their intention to provide the Borrower with a loan amounting to the sum of five thousand dollars, which can also be represented as the numerical figure $5,000.
2. INTEREST RATE
2.1 Select one
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The loan shall be interest-free.
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The loan shall carry an interest rate of 3% per annum.
If the first option is selected, the loan will not accrue any interest, and the Borrower will only be responsible for repaying the principal amount borrowed.
If the second option is selected, the loan will accrue interest at a rate of three percent (3%) per year. The interest will be calculated annually based on the outstanding balance of the loan and added to the total amount owed by the Borrower.
3. REPAYMENT SCHEDULE
The Borrower shall repay the loan according to the following schedule:
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Installment Amount: $200
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Frequency: Monthly
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Total Number of Payments: 24
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First Payment Due Date: ( 1st of each month)
4. METHOD OF PAYMENT
The Borrower is required to make payments to the Lender through bank transfer. They must initiate transfers using the provided account details, ensuring that the payments are credited to the Lender's designated account. This method offers a secure and traceable way to handle loan repayments.
5. LATE PAYMENTS
If the Borrower misses a scheduled payment, they will incur a late fee of $20 for each day that the payment remains overdue. This provision encourages timely repayment and compensates the Lender for any inconvenience or additional costs incurred due to late payments.
6. PREPAYMENT
6.1 Select one
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The Borrower may prepay the loan without penalty.
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Prepayment of the loan is not allowed.
If the Borrower chooses to prepay the loan, they have the option to do so without incurring any additional penalties or fees. This means that they can pay off the loan before the scheduled repayment date without any financial consequences.
Alternatively, if the Borrower prefers not to allow prepayment of the loan, they are restricted from paying off the loan before the scheduled repayment date. In this case, the Borrower must adhere to the agreed-upon repayment schedule without the option for early repayment.
7. USE OF FUNDS
The funds from this loan are designated specifically for home renovation purposes. The Borrower agrees to utilize the loan amount solely for expenses related to improving or repairing their residence, such as refurbishments, repairs, or upgrades. This ensures that the borrowed funds are used for the agreed-upon purpose outlined in the loan contract.
8. COLLATERAL
8.1 Select one
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The loan is unsecured.
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The loan is secured by the following collateral:
2019 Toyota Camry vehicle with VIN ABC123456789.
If the first option is selected, it means that the loan is unsecured, and no collateral is required to secure the loan. The Borrower is solely responsible for repaying the loan amount as per the terms of the agreement.
If the second option is selected, the Borrower must provide collateral to secure the loan. The collateral could be any valuable asset owned by the Borrower, such as real estate, vehicles, or valuable possessions. The collateral serves as a form of security for the Lender in case the Borrower defaults on the loan
9. GOVERNING LAW
The stipulations and interpretations contained within this Contract will be subject to the governing parameters and legal provisions as established by the laws set forth within the specified jurisdiction.
By signing below, each party agrees to all terms and conditions found in this Contract.
[Your Name]
[Date Signed]
[Friend's Name]
[Date Signed]
