A free loan contract is a legally prepared document based on certain clauses and terms to fix the loan amount between the lender and the borrower.
Sample Free Loan Contract:
Contract Number: 45/ FL
Effective Date of the Contract: October 15th, 2010
This Loan contract is made between Greenway Financer Pvt. Ltd, hereinafter known as the lender party AND Ms. Sheena Smith, herein after referred as the borrower.
This loan contract is commencing on October 23rd, 2010 and is terminating on October 23rd, 2011.
Whereas, the lender party has received the written request from the borrower, and the borrower is interested to take a loan from the lender party.
In consideration to the covenants, following mentioned are the terms for both the parties:
The borrower is approved with the loan amount of $ 23456 at the fixed rate of 6%. The borrower will pay the monthly instalment of $ 345 to the lender party for a year.
The lender party Obligations:
The lender party will not increase the rate of interest and principal amount in any case. Any kind of issue will be informed to the borrower by the lender party.
The borrower Responsibilities:
The borrower will make the agreed instalment payment to the lender party at the fixed date. In case of late payment, the borrower will be charged with extra $50.
The termination term will be true in case of any unsettled issue. The guilty party has to make the payment of 23% of the total loan amount to another party as compensation.
Hereby, both the parties are requested to sign the contract:
Signature of the Lender:
Signature of the Borrower: