The amount of the loan is printed in a credit agreement document. The terms and conditions avoid future disputes over credit maturities. With respect to interest on the loan amount, the amount of interest is also part of the documented material. The clear amount of credit ensures that there is no disagreement about what the borrower receives. The borrower is also clear about repayment expectations. Repayment expectations include the amount of the loan plus interest. It also includes the length of time the borrower must repay. The lender`s time for repayment is one of the options that the borrower supports in writing. The delay can be days, weeks, months or years. I Owe You (IOU) – The acceptance and confirmation of money lent by one (1) party to another. There are usually no details on how or when the money is repaid or lists interest rates, payment penalties, etc. By signing this agreement, Payee and Promisor confirm that Payee Promisor will repay with the following payment schedule. When we talk about credit, most people refer to loans to banks, credit unions, mortgages and financial assistance, but people do not think about getting a credit contract for their friends and family, because that is what they are — friends and family.
Why do I need a loan contract for the people I trust the most? A loan contract is not a sign that you don`t trust someone, it`s just a document that you should always have in writing when you lend money, just like with your driver`s license at home when you drive a car. The people who give you a hard time to make a loan in writing are the same people you should care about the most — always have a credit contract when you lend money. In other words, it must be clearly presented as a legal loan letter. It will make the agreement more serious as a whole. A promise to pay a debtor and a creditor lending money. If you have to borrow money from a friend, it is best to put aside your friendship and simply consider it as a business contract with friends and design an official money loan contract with all the details surrounding the transaction.