Personal loan contract- What should you know?
Loan contract is the major part of your loan process. As most loan procedures are online today, you don’t have to go the lender, read the loan contract and then sign. Once your loan is approved, you will be sent the electronic copy of the loan contract, which can be read from your workplace or home and place your e-signature on it. Going through the loan agreement is a significant step, that must not be skipped or ignored. If you are planning to borrow are personal loan online, Ficc is the best place, for more information, please visit, www.ficc.fi .
Loan contract is an agreement between the borrower and the loan lender, which states that the borrower has borrowed a fixed amount of money from the lender, and will be repaying the same, as per the agreed repayment plan.
A carefully constructed loan agreement will have the following features-
1.The interest rate must be clearly mentioned in the contract. The type of interest rate(Flat rate or floating rate) that is specified for this loan must be referred to in the contract.
2.The consequences of the prepayment of the loan, if any, must be clearly mentioned in the contract.
Some lenders will charge early repayment penalties if the borrower tries to settle the loan before the loan term.
3.Default interest rate, if applicable, must be clearly mentioned in the contract.
If the borrower, fails to repay the loan in the given period, then the lender has the right to increase the interest rate, which will be added to the loan amount.
4.The loan amount must be specified in the agreement.
5.Repayment provision must not be ignored.Repayment can be made two ways-
a.The entire loan amount can be repaid on a specific date that is mentioned in the contract.
b.Repayment can be made through installments up to a period of time specified in the contract.
The repayment method opted in the loan has to be specified in the loan contract.
If the event of default occurs in the loan process, then the lender may ask for the repayment immediately.