Introduction
Loan agreement letter is a guarantee by a bank or someone with financial backing so that the bank can readily allow loan to them. The point is that bank should be convinced of the fact that the person or the institution has the financial resources to pay back. The letters of credit are in practice in spheres like international trade, where payment is rarely made on delivery.
Loan Agreement Letter Tips
Tips for writing a Letter of Credit:
· The language should be simple and direct
· Avoid ambiguous words and terminology
· State everything in clear and concrete terms
· Make sure both parties understand all their terms and obligations
· As a party you should make it sure that the terms of the letter of credit are reasonable for both parties
Sample Loan Agreement Letter
Subject: Loan agreement letter
Respected Sir/Madam,
This agreement is to give a legal form to the loan taken out from the first party Mr. Radhakrishnan to the second party Mr. Ranganathan an amount of Rs 20,0000 with a monthly interest of 14%. I agree that the transaction is part of the party taking money from my private bank on the security of gold of 2 kgs worth. As per the agreement, the second party will remit the interest regularly at my office either through cash cheque or through liquid cash.
The loan as per the agreement has the repayment time of 5 years and after which compound interest will be levied on the second party for the amount already taken. In case if in any case the second party is unable to repay the amount means the first party will have the right on the gold ornaments in exact proportion to the mount due taking together the original amount and the compound interest.
If the second party has any doubt regarding this contract, he is free to contact the first party regarding clarifications.
Yours sincerely,
Thanking you,
Yours sincerely,
Gurumurthy
Loan Agreement Letter Template
From,
__________
__________
__________
__________
Date: _____ (Date on Which Letter is Written)
To,
__________
__________
__________
__________
Subject - _______________________(Mention the purpose)
Respected _______(Name)
Hereby note that this letter is to grant loan from my institution to the second party on gold remittance as security to the tune of Rs _____(mention the cost)with a monthly interest of ____(mention the percentage) to the amount. The repayment period for which is ___(mention the no. of years) and in case if the second party failed to repay the full amount within that period, the terms and conditions documented in the agreement letter will be applicable then and there.
Hope you will get back to me very early
Thanking you.
Sincerely,
Name and signature
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