When two parties enter into a loan agreement, it is essential to have a legally binding document that outlines the terms and conditions of the loan. In the Philippines, a loan agreement between two parties provides a framework for borrowing and lending transactions and protects the rights and interests of both parties involved.
The following is a sample loan agreement between two parties in the Philippines:
Loan Agreement Between Two Parties
This Loan Agreement (the “Agreement”) made on [Date] between [Lender’s Name] (the “Lender”) of [Address], and [Borrower`s Name] (the “Borrower”) of [Address], collectively referred to as the “Parties.”
1. Loan Amount and Interest
The Lender agrees to lend [Amount in Words (Php. __________)] (the “Loan Amount”) to the Borrower. The Borrower agrees to repay the Loan Amount in [Number of Months] monthly installments, commencing on the [Date]. The Lender and the Borrower will agree upon a fixed interest rate of [Interest Rate%] percent per annum, which shall remain fixed throughout the term of the Agreement.
2. Repayment Schedule
The Borrower agrees to repay the Loan Amount, along with the interest, in [Number of Installments] equal installments of [Installment Amount in Words (Php. __________)] per month, beginning on the [Date], and continuing on the same day every month thereafter. The Borrower shall make all payments until the entire Loan Amount and interest have been paid in full.
The Borrower may prepay the Loan Amount at any time. The prepayment amount will be the outstanding balance of the Loan Amount and will include any unpaid interest. No penalty or fee shall be charged for prepayment.
4. Default and Remedies
If the Borrower fails to make any payment on the due date or breaches any other term of this Agreement, the Lender shall have the right to declare the Loan Amount, along with the interest, immediately due and payable, and the Lender may recover all outstanding amounts and other damages from the Borrower.
5. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the Philippines.
6. Entire Agreement
This Agreement constitutes the entire agreement between the Parties and supersedes all prior or contemporaneous agreements or understandings, written or oral, relating to this Loan.
No amendment or modification of this Agreement shall be valid unless it is in writing and signed by both Parties.
IN WITNESS WHEREOF, the Parties have executed this Loan Agreement on the date first above written.
Having a loan agreement between two parties is essential in protecting both the lender and borrower in case of a dispute. Make sure to have the agreement reviewed by a legal professional before signing to ensure that it complies with Philippine laws and regulations.