Credit agreements are not a sole financial instrument of credit institutions. Even private lenders can become lenders. Here, however, the question arises for laymen in particular about the establishment of a legally valid loan agreement. However, with the help of credit agreement templates and private loan agreement model it is possible to easily and quickly download and complete a credit agreement on the World Wide Web.
All facts about the guidebook “Credit Agreement Pattern” at a glance:
- Credit agreements can also be concluded between private individuals.
- Private individuals do not have to but have a personal relationship with each other.
- A few specifications must be complied with by law in a contract.
- Some points are worth considering for both parties
- With the help of a loan agreement template, you can set up a credit agreement within a few minutes
1. Loan agreements between private individuals
Loans between private individuals have always existed and will always exist. This is not dubious donors from dark backyards, but honest business people who either want to help a friend out of financial hardship or seek a way out of the Sparwüste in times of low credit interest. Credit is the price that banks and other financial service providers are willing to pay for working with their own money.
Easier: Credit gets the bank customer on his saved money. The debit interest, so that what the bank customer has to pay for a loan, are also sinking, but not at the same speed and certainly not on an equally low level. As a result, just wealthy business people who have enough liquid funds at their disposal to profitably attach them, have the need to make more of their money.
Borrowers and lenders have an interest
Here are loan portals that support the so-called social lending. The prospective borrower only has to leave his personal information on the page and describe his situation truthfully. If any of the lenders are interested in investing, they will contact the credit-worthy petitioner. Here then further information is exchanged. If the concept convinces both sides, a credit agreement is concluded. There are credit agreement templates in order to be able to guarantee a legally valid conclusion.
But even in a less anonymous environment it often comes to the award of personal loans. The cause can be negative Private credit entries, which makes it difficult to obtain loans from traditional banks. In addition, it can just give acquaintances and money for friendship award. This means that the loans will earn less interest than the usual market rate. Because even if the interest rates are below the usual borrowing rate, they are usually still above the interest rate.
An example:
Thanks to some economic unpredictability and the activities of the ECB, the key rate at the beginning of 2015 was 0.05 percent. Theoretically, banks could go down to that level. In fact, most financial services companies dropped their deposit interest rates to 0.1 percent. Loan lending rates also hit a record low, but are still at 4.5%. This makes an interest margin of 4.4 percent within which the agreed interest can move, but in which both parties benefit from the loan.
Let’s say you agree on 3 percent and it is a loan over 3,000 euros, which should be paid off after one year. The lender generates an interest of 90 euros. In the low- interest savings system, he would get just 3 euros for one year. Instead of a chic five-course menu, there is only one sandwich from the baked goods discount store. The borrower, however, would have to pay at least 135 euros at a bank, which corresponds to 45 euros additional costs.
Many such examples could be spun, which is why the awarding of personal loans is worthwhile for both sides. In the case of negative Private credit entries, however, it is to be expected that the lenders will let the increased risk be paid with higher interest rates. Given that banks do not want to take that risk at all, so is their right.
Loan agreements between private individuals can take place in a social and anonymous environment. If the borrower has to resort to this option for reasons of negative Private credit entries, a higher interest rate can be expected. Other reasons may lie in mutual benefit by low credit rates and relatively high debit interest.
2. Legal requirements
A credit agreement is subject to the law of obligations and can therefore be freely designed by the parties. Only a few key points must be present, other points are in their design in the hands of the contracting parties. However, it is advisable to clarify certain things in advance, as long as no money has been flowed and dependencies created. Emotions should be left out as long as possible.
A credit agreement should – but need not – include the following points:
- parties
- loan amount
- loan period
- interest
- repayment way
- delay
- collateral
- Notarial acknowledgment of guilt
- termination
Some of these issues have already led to serious disputes in the past. Therefore, both parties should take time in advance to reflect on the individual points in peace. It is also no betrayal of trust, if at this point a professional opinion is consulted. Especially in the case of personal loans, it may be due to partial knowledge to legally relevant misunderstandings.
3. Loan Agreement – Set up a loan agreement in just 5 minutes
Loan agreement between private individuals
Loan agreement between the
Borrower: ______________________________________________________________
First name, last name, address
and the
Lender: ________________________________________________________________
First name, last name, address
1. The sum and purpose of the loan
The lender grants the borrower a loan of the following amount:
_______________________________________________________________________________________
Height in number and font
The loan should be used for the following purpose:
____________________________________________________________________________
2. The payment of the loan
The loan is to be transferred to the following account on ________________ (date):
Account owner: _____________________
IBAN: _____________________
BIC: _____________________
3. The repayment
The loan is subject to an interest rate of ____% per quarter / half year / year.
The eradication takes place
Monthly Quarterly Half yearly Yearly
———- please circle ———-
in the amount of a repayment installment of ___________ Euro on the account mentioned below.
Account owner: _____________________
IBAN: _____________________
BIC: _____________________
4. Contract basis
At the time of the conclusion of the contract, creditworthiness existed on the part of the borrower.
5. Late payment
5.1 If the borrower defaults more than ___________ days in arrears, the interest rate will automatically increase by ___________ percentage points.
5.2 If the borrower is in default more than three months, the contract can be terminated without notice, including the due date of the outstanding interest payments.
6. Collateral
6.1 Collateral is not part of the loan agreement.
6.2 There is a security transfer of the following items
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Please list individually
to the lender instead.
6.3 There is a security assignment of the following collateral to the lender:
□ claims that fall under the seizure exemptions of § 850c ZPO or
□ Claims arising from a life insurance (details of the relevant life insurance).
These may be used in the event of non-performance on the part of the borrower to satisfy the lender.
7. Notarial acknowledgment of guilt
The borrower must provide the lender with a notarised acknowledgment of debt. This is an enforcement submission in the amount of the loan. This must be provided to the lender in the original.
8. Termination
In case of important reasons, the lender may terminate the contract at any time without notice.
9. Final provision
This agreement reflects the full agreement of the parties. Verbal collateral agreements do not exist. Amendments and supplements to the contract must be in writing. This also applies to a deviation from the written form requirement
This agreement reflects the full agreement of the parties. Verbal collateral agreements do not exist. Amendments and supplements to the contract must be in writing. This also applies to a deviation from the written form requirement.
________________________ __________________________________
Place, date signature borrower
________________________ __________________________________
Place, date signature lender
4. A conclusion: The loan agreement is written quickly thanks to private loan agreement pattern
With the help of a private loan agreement model, one can quickly and easily write a loan agreement between two private individuals. How and why these individuals find each other is not relevant here. As long as all crucial points have been worked out in advance with care and there are no discrepancies between the parties, there is nothing in the way of a loan agreement based on a private loan agreement.
In order to have no disadvantages in case of dispute due to form errors, a template may be useful. In addition to numerous templates on the World Wide Web, which are often available for download, they can also use private loan agreement pattern, which was listed above.
