Free Unsecured Loan Contract Template
Unsecured Loan Contract
1. Parties
This Unsecured Loan Contract (the "Contract") is made and entered into on [Date], between [Your Name], located at [Your Company Address], from now on referred to as the "Lender", and [Borrower's Name], located at [Borrower's Address], from now on referred to as the "Borrower".
2. Background
The Borrower seeks a loan from the Lender of $50,000 to finance inventory purchases for their retail business expansion. The Borrower plans to use the funds to increase their inventory stock, enhance product offerings, and meet the growing demand from customers. The Lender, understanding the Borrower's business needs and growth potential, is willing to extend credit to the Borrower on an unsecured basis, subject to the terms and conditions set forth herein.
3. Loan Terms
3.1 Loan Amount: The party referred to as the Lender hereby agrees and confirms to provide a loan to the party referred to as the Borrower, under agreed terms and conditions, a principal sum of money amounting to Ten Thousand Dollars, represented in numerical form as $10,000.00.
3.2 Interest Rate: As per the terms of the agreement, the loan that has been granted shall accumulate interest. This interest will be accrued at a set rate of 6.5% every year. The calculation of the interest will be based on the outstanding principal balance of the loan. Moreover, this interest will not be simple, instead, it will be compounded every month throughout the loan.
3.3 Repayment Terms: The Borrower shall repay the loan in 24 consecutive installments of Four Hundred Seventy-Five Dollars ($475.00), commencing on March 1, 2024, and continuing on the first of each month thereafter, until the loan is fully repaid.
3.4 Prepayment: The individual or entity that borrowed the money, referred to as the Borrower, has the authority and is holding back the right to make a prepayment on their loan. This can be done partially or entirely, according to what the borrower decides. Furthermore, the borrower does have the freedom to make this prepayment at any given time without being burdened with any form of financial penalty.
3.5 Late Payments: In the occurrence of a situation where the Borrower fails to make a timely payment, it becomes their responsibility to pay an additional late fee. This fee amounts to twenty-five dollars which must be paid per each day the owed payment continues to not be paid beyond the payment's specified due date.
4. Representations and Warranties
Borrower's Representations: The individual or entity that is borrowing declares and guarantees the following conditions:
a. The Borrower has full power and authority to enter into this Contract and to perform its obligations hereunder.
b. The execution, delivery, and performance of this Contract by the Borrower do not violate any applicable law or any agreement to which the Borrower is a party. c. The Borrower will use the loan proceeds solely for the purposes stated in this Contract.
Lender's Representations: The individual or entity providing the loan, hereby known as the Lender, makes the following representations and guarantees, asserting that:
a. The Lender has full power and authority to enter into this Contract and to perform its obligations hereunder.
b. The execution, delivery, and performance of this Contract by the Lender do not violate any applicable law or any agreement to which the Lender is a party.
5. Covenants
5.1 Financial Statements: As per the terms of this contract, the Borrower has the responsibility to provide the Lender with various documents that help to clarify their current financial condition. These documents include crucial financial statements, among other relevant information. The Lender, at their discretion, may request this information at various times during the contract's duration. It is expected that these requests from the Lender are made in a reasonable manner and frequency, and the Borrower is obligated to respond promptly and accurately to such requests.
5.2 Maintenance of Records: The individual or entity that is borrowing funds, hereby referred to as 'The Borrower', is obligated and required to maintain and keep up-to-date records that accurately reflect all of their financial transactions. The purpose of this is to ensure clarity and transparency in their financial dealings. Whenever the Lender - the organism or individual offering the loan - requests for it, the Borrower is obligated to provide access to these records. This is meant to allow the lender to overview the borrower's financial status and validate the proper use of the loaned funds.
Default and Remedies
Events of Default: The events that are listed below shall be regarded and hereby established as ones that would institute an occurrence of default under the terms and conditions of this Contract:
a. Failure by the Borrower to make any payment when due under this Contract.
b. Breach by the Borrower of any other provision of this Contract.
c. Insolvency or bankruptcy of the Borrower.
6. Remedies
If a default takes place, the entity that is lending the funds will be awarded the appropriate privilege to put into action any solution or recourse that might be accessible to them by the laws that are currently in effect. This could embody various potential actions, but is not just limited to expediting the progression of the loan to a point of maturity and subsequently requesting that immediate repayment be made regarding the remaining balance that is yet to be settled.
7. Governing Law and Jurisdiction
This Contract shall be governed by and construed following the laws of [Jurisdiction]. Any dispute arising out of or in connection with this Contract shall be subject to the exclusive jurisdiction of the courts of [Jurisdiction].
8. Entire Agreement
This Contract is the comprehensive, all-encompassing contract between the parties involved, and it specifically pertains to the subject matter specified herein. This means that any earlier contracts or understandings that might have existed between these parties are now null and void, superseded by this Contract. This applies regardless of whether those previous contracts or understandings were formalized in writing or were made verbally; any correspondences or agreements relating to the subject matter that were made before are effectively nullified and replaced by this Contract.
9. Execution
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]
