Private loan contract – For most loans from one individual to another. If the total amount of the loan is of great value, it is a good idea to require the signature and details of a guarantor – someone who can vouch for the borrower and work as a guarantee of repayment, the borrower should not be able to repay. For more information, check out our article on the differences between the three most common credit forms and choose what`s right for you. The loan document serves as legal written proof between these two parties – the lender and the borrower – the lender promising to lend to the loan agreement a certain amount indicated in the loan form and the borrower promises to repay the amount, with the applicable interest, in accordance with the repayment plan mentioned in the document. Guaranteed Loan – For people with lower credit scores, usually less than 700. The term “secure” means that the borrower must establish guarantees such as a house or a car if the loan is not repaid. It is therefore guaranteed to the lender to receive an asset from the borrower if it is repaid. The first step to getting a loan is to make a credit check on itself, which can be acquired for $30 from TransUnion, Equifax or Experian. A credit score ranges from 330 to 830, the figure being higher, which represents a lower risk for the lender, in addition to a better interest rate that the borrower can get.
In 2016, the average credit value in the United States was 687 (source). The use of a loan agreement protects you as a lender because it legally requires the borrower to repay the loan in regular or lump sum payments. A borrower can also find a loan agreement useful because he spells the details of the loan for his files and helps keep an overview of the payments. The loan agreement should clearly state how the money is repaid and what happens when the borrower is unable to repay. 1. Amount of the loan. The parties agree that the lender can use the borrower with the borrower in the E, while the loans can be granted between family members – a family credit contract – this form can also be used between two organizations or companies that have a business relationship.