Use the LawDepot credit agreement model for business transactions, student education, real estate purchases, down payments or personal credits between friends and family. Considering that both parties agree to respect and comply with the commitments and conditions set out in this agreement to meet the commitments and conditions set out in this agreement: a loan agreement is broader than a „loan“ to the borrower and borrower who rem predicts repayment of the loan to the lender: a loan contract is broader than a debt and includes clauses on the whole agreement , additional spending and the amending process (i.e. amending the terms of the agreement). Use a loan contract for large-scale loans or from several lenders. Use a debt note for loans from non-traditional lenders such as individuals or businesses rather than banks or credit unions. 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. Depending on the amount of money borrowed, the lender may decide to have the agreement approved in the presence of a notary. This is recommended if the total amount, the capital plus interest, is more than the maximum acceptable rate for the small claims court in the jurisdiction of the parties (usually 5,000 usd or 10,000 USD). For private loans, it may be even more important to use a loan contract. For the IRS, money exchanged between family members may look like either gifts or credits for tax purposes.
A lender can use a loan contract in court to obtain repayment if the borrower does not comply with the contract.