Free Small Loan Contract Template
Small Loan Contract
This Small Loan Contract ("Contract") is made on [Effective Date], between: [Your Company Name], a financial institution duly organized and existing under the laws of [Jurisdiction], with its principal place of business located at [Your Company Address] (hereinafter referred to as the "Lender"). [Borrower's Name], residing at [Borrower's Address], (hereinafter referred to as the "Borrower").
1. Loan Details
By this contract, the party acknowledged as "The Lender" presents their full and considered commitment to furnish the party recognized as "The Borrower" with a monetary loan. The specific sum of this arranged financial loan is to amount to $5,000 (Five Thousand Dollars). For this document and all other pertinent discussions or writs, this fiscal transaction is to be referenced henceforth as the "Loan".
2. Interest Rate
As per our contract, interest shall be accrued on the loan that you have taken. The rate at which this interest will accumulate is 8% every year. However, this is not a simple interest but compounded. Therefore, you will be charged the amount of the loan that is still outstanding, and this calculation will take place every month. This means the interest accumulates faster because the outstanding interest from the previous month adds up to the principal balance, and the next month's interest is calculated on this new total.
3. Repayment Terms
The individual who has borrowed the loan henceforth referred to as the Borrower, is obligated and hereby agrees to repay the monetary amount that was borrowed, referred to as the Loan, by the schedule outlined below:
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Installment 1: April 15, 2050, USD 500.00
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Installment 2: August 30, 2050, USD 500.00
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Installment 3: December 15, 2050, USD 500.00
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Installment 4: April 30, 2051, USD 500.00
4. Disbursement
The Loan will be issued to the Borrower in a format of two separate disbursements as specified below:
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The first disbursement of $5,000.00 shall occur on January 15, 2050.
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The second disbursement of $3,000.00 shall occur on July 1, 2050.
5. Fees and Penalties
By the Loan Contract and Schedule of Fees stipulated by the Lender, the Borrower assumes the responsibility of settling any penalties and fees that may be applicable. The onus is on the Borrower to remit these payments, failing which, they may be held liable. It is incumbent upon the Borrower, therefore, to ensure they fully understand and adhere to the conditions outlined within the aforementioned Loan Contract and Schedule of Fees. The Lender has the right to enforce these terms should the Borrower fail to comply as stipulated.
6. Prepayment
The Borrower carries the right to make an early settlement, either in full or in part, for the loan. The borrower can decide to exercise this right at any moment, without facing any form of monetary penalty for choosing to do so.
7. Default
It will be deemed that the borrower has defaulted under this Contract if:
a. The Borrower fails to make any payment when due; or
b. The Borrower breaches any other provision of this Contract and fails to remedy such breach within 14 days of receiving notice from the Lender.
8. Remedies on Default
If a default occurs, the Lender possesses the option to declare the total amount that remains outstanding on the Loan. This incorporates all the interest that has accrued over time, as well as any other outstanding amounts that are owed as part of the agreement between the parties. The Lender may declare that these amounts are due for payment immediately.
9. Governing Law
The governing laws and interpretation of this Contract shall fall under the legislation of the specified [Jurisdiction].
10. Notices
According to the terms of this Contract, any notice necessary or allowed to be issued must be presented in written form. There will be an assumption that said notice has been appropriately given if it is delivered personally, sent through registered mail with postage prepaid, or if it is transmitted electronically by email. For this purpose, the parties are required to provide their addresses in this Contract, where the notices will be sent.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the date first above written.
[YOUR NAME]
[DATE SIGNED]
[BORROWER'S NAME]
[DATE SIGNED]
