The loan application process is daunting, to say the least, and with the risk of your application coming getting the Rejection stamp always a possibility, you need to make sure that you have all the basics out of the way, while also making sure that you do everything necessary to improve the chances of the loan getting approved. But the need to exercise caution doesn’t end there. Even after you have the nod of approval from the lender, you still need to make sure that the terms of the loan contract are agreeable. A loan contract or a loan agreement is the legally binding agreement between the lender and the borrower. This document stipulates the terms of the loan, the method of payment, repayment schedule, and it also stipulates the collateral, interest rates for the loan, and the terms applicable should the lender default the payment. These details determine whether a dispute is resolved effortlessly in the future or not, and it’s also important for your records. Even where disputes don’t arise, the agreement is a good thing for the sake of your records. The loan contract is also important because it offers clear guidelines regarding what the parties to the agreement are getting themselves into, while also preventing the risk of an illegal practice, such as usury/ being charged more interest than the statutes allow. You might also like this agreement because it stipulates the precise amount/ value of the loan extended to the borrower, as well as the purpose of that loan and generally a formality for the loan. While banks and other financial institutions have sample loan agreements, they are not the only lenders around. You could be a lender too, and since it’s important for you that everything is done by the book, a free California loan agreement form will help you get started on the right foot. This form is compliant with the statutes, and its terms ensure that you have everything you need for the protection of your finances. So, whether you are looking for financial protection for a loan you are giving to your best friend, relative, or colleague, this loan free loan agreement template ensures that you have everything set out right. Note that if you choose to use a promissory note in place of the loan contract, perhaps because you are offering a short-term loan (7/ 14 days), the promissory note will do just fine. Unlike the loan agreement in California, which has to be signed by the lender and the borrower, the only signature necessary in a promissory note is the borrower’s – the borrower promises to pay back the loan amount by a specific, agreed date.
To help you get started with personal or business loan contracts in San Diego, Los Angeles, Sacramento, San Francisco, Fresno, Oakland, San Jose, or any other city in California, get our free loan agreement forms today.
