Personal Loan Agreement with Collateral Sample

A personal loan agreement with collateral is a legal document that outlines the terms and conditions of a loan agreement between a lender and a borrower. In this type of loan agreement, the borrower will provide collateral, such as their car or home, as security for the loan. This ensures that the lender has some form of recourse if the borrower fails to repay the loan as agreed.

When drafting a personal loan agreement with collateral, it`s important to ensure that it meets the legal requirements of your state or province. You may want to consult with a lawyer or a professional to help you draft the agreement to ensure that it is legally enforceable.

Here is an example of a personal loan agreement with collateral:

Loan Agreement

This Loan Agreement (the “Agreement”) made on [Date of Agreement] between [Lender Name], with an address at [Lender Address] (the “Lender”), and [Borrower Name], with an address at [Borrower Address] (the “Borrower”).

Loan Amount and Interest

The Lender agrees to loan the Borrower the sum of [Loan Amount] (the “Loan Amount”) with an interest rate of [Interest Rate] percent per annum, calculated on a 360-day year basis. Interest on the Loan will begin to accrue on the date of this Agreement.

Collateral

The Borrower shall provide the following collateral to the Lender: [Collateral Description]. This collateral has a value of [Collateral Value]. The borrower agrees to deliver the collateral to the lender upon signing this Agreement.

Repayment

The Borrower agrees to repay the Loan Amount and all accrued interest to the Lender in full on or before [Loan Maturity Date] (the “Maturity Date”). Repayment shall be made in [Payment Frequency] payments in the amount of [Payment Amount] each, beginning on [First Payment Date] and continuing every [Payment Frequency] thereafter until the Loan is fully repaid.

Default

If the Borrower fails to make any payment on the Loan when it`s due, the Loan will be in default, and the Lender may take possession of the collateral. The Lender may also sue the Borrower for the full amount of the Loan plus all accrued interest, collection costs and attorneys` fees.

Governing Law

This Agreement shall be governed by and interpreted in accordance with the laws of [Governing Law].

Conclusion

A personal loan agreement with collateral offers a way for borrowers to secure a loan, while providing lenders with a level of protection. It is important to draft this agreement with the help of a professional to ensure that it meets the legal requirements of your state or province. Additionally, both the lender and borrower should carefully review the agreement before signing to ensure that they fully understand the terms and conditions of the loan.


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