Loan agreement – what should you watch out for?

Signing a loan agreement, even with a family member, means taking responsibility that you want to do or do not need to be completed. The loan agreement may be concluded orally. However, this generates some risk of inaccuracy. It is worth, however, with a loan over USD 500, however, to write down the appropriate contract.

Read the contract

Read the contract

Regardless of who you sign the contract with, you should read it carefully. Pay attention to all issues regarding among others:

  • the amount we borrow,
  • the total cost of the loan that will have to be repaid,
  • loan interest rate,
  • repayment period for the financial liability,
  • or penalties for failure to meet the repayment deadline.

The recently introduced updated Anti-Lieutenant Act requires that the contract includes all legal issues as well as information on costs. Unfortunately, we often don’t read them carefully. This may be due to:

  • stress caused by the situation,
  • lack of time
  • or ordinary recklessness.

Don’t let us go through the process of signing the loan agreement properly. However, remember that if you sign a document, you are obliged to do what it contains. The fact that we have not read something is only our problem.

Loan return conditions

Loan return conditions

It is worth and even necessary to read the terms of repayment of the loan. Often, the focus only on achieving the goal of receiving a certain amount of money disturbs our sobriety of thinking and does not allow us to clearly assess whether the loan is beneficial to us at all. Often, it turns out that the seemingly attractive offer, the opportunity to be a really bad business.

Remember that a loan agreement is worth signing even if you take out a private loan.

However, the loan agreement must always contain all necessary information. Even those with additional fees or high interest rates. If you do not read this information carefully and sign the contract, you will be required to pay it immediately. Therefore, you should be very thorough and careful, read all documents thoroughly, and ask and explain all ambiguities that will be included in the loan agreement.

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