When you feel that everything, in life, is going on smoothly, all of a sudden, you will be faced with a problem – a financial problem. You will need urgently some funds to meet an emergency commitment. You don’t have the required fund with you.
When you have such a contingency, what is the option? You have no other option than to ‘borrow’ the required funds from some sources; it could be one of your friends or relatives, a bank or a private financial company. The money that you get through borrowing is called a loan. Here, you are the borrower and the one who gave the money to you is the lender.
When a lender gives money, there will be a contract – also known as agreement – between the concerned parties i.e. the lender and the borrower. This contract will be in writing and both the parties have to affix their signatures on the document. This document binds both the parties and they are expected to adhere to the conditions mentioned in it. Normally, this contract will have a special clause, called ‘protective clause’ which will protect the interests of both the parties, especially in the event of any failure on the part of one party to comply with any of the requirements mentioned in the contract. All necessary details will be included in the contract with http://www.okaycreditloan.com/.
Mention about Government Laws
This loan contract will contain all the points that the lender and borrower had already discussed and accepted. Apart from these points, there should be specific mention about the government laws relating to loan transactions. The said laws are, in fact, framed in such a way that they benefit both the lender and the borrower. The contract, after both parties sign it, becomes a legal document. It is, therefore, necessary for both the parties to fulfill the obligations contained therein, without fail. Non-fulfillment of any obligation by any party will attract legal proceedings. This document can be produced in a court of law, if necessary.
As already said, every single detail, as discussed and accepted by both the parties, should find place in the contract. The interest rate, the term of repayment, whether it is in installments and if so, how many and at what intervals, or is it to be paid in one lump sum before a particular date, and fees payable, if any, etc. should be included in the contract. If there will be any penal fee for delay in payment or in the event of pre-closure, that detail also should be included in the contract. Only when all these details are mentioned, the total amount, relating to the loan, could be worked out. To put it straight, the contract should include every single detail; it should be self-explanatory, without leaving anything for chance or doubt!
It is then normal practice to see that every loan contract specifically includes the ‘rights’ and ‘obligations’ of both the parties to the contract. For certain valid reasons, a contract could always be cancelled. The reasons or grounds which could lead to the cancellation of the contract should be clearly mentioned. The specific laws of both the national and the local governments, concerning transactions of such nature, should be included.
Besides procedures for taking action in the matter of non-compliance, consideration of waivers, if any – all these are to be included in the contract. To make sure that the contract has all the details required and there is nothing left out, it will be a good idea to seek the assistance of a professional legal advisor.