There are many instances in life in which a person may want to draft a loan agreement. Perhaps you are making out a personal loan to a family member, and you want to make sure that the family member will eventually pay you back. Perhaps you make an emergency loan to a close friend, and you want to protect yourself so that a friend will pay you back. Maybe you want to enforce some extra terms, such as charging interest on the unpaid balance of loan. If so, you can draft legal documents that indicate these terms and ensure that your interests are protected at all times.
It is very easy to create the loan documents that you need by visiting LegalVision. You may wish to start by browsing all of the ready-made loan agreement templates that are available at Legal Vision. This can help you to take the guesswork out of creating a loan agreement. You can also gain an appreciation for the basic structure of any loan agreement.
After you have looked at a few examples of loan agreements, now you can begin the process of writing one. The first step that you will want to take is to write out the names of all individuals who are involved in the loan contract. Make sure that you take note of any cosigners that a debtor may be using in creating a loan contract with you.
The next step is for you to clearly write the principle amount that is being provided to the other party. Along with the principle amount, you will also want to clearly state an interest rate amount that can be attached to the principle. You want to be as clear as possible about the amount of interest that will be tacked onto an unpaid balance amount every month. You will also want to be clear about the time periods in which an interest rate will be charged onto an unpaid balance.
One of the most important next steps is to draft the terms of the loan contract (also see Terms of a Distribution Agreement). This entails figuring out the time period that a person will be given for repaying the loan. Some people provide short-term loans that must be repaid within one year, while other people opt to give as much as 10 or 12 years for the repayment of a loan. You can just choose a time period that feels right to you.