The client must properly inform the lender of any change in residence address, change of job, occupation or business, change in housing status, change in income level, etc. during the term of the loan. The time frame in this information must be notified and the type of notification is indicated in the clause. The lender should only have the right to demand repayment of the loan in the event of a delay and lawsuit. If the delay default has been corrected or reversed, the lender`s right to accelerate should cease. They may also include advance information if the borrower is interested in prepaying the loan. Many borrowers are concerned about advances and you would be wise to include a clause in your credit agreement that talks about advance options, if any. If you allow a prepayment, you must include this information and details if they are allowed to pay all or part only in advance and if you charge a down payment fee if they wish. If you charge a down payment fee, you need to state in detail how much it will be. Traditionally, lenders require that a percentage of the principal be paid in advance before they can pay the balance. If you do not authorize the advance, you must state in detail that this is not permissible, unless you, the lender, have given written permission. Particular attention should be paid to all «default cross» clauses that affect the fact that a failure in one agreement triggers a standard between another. These should not apply to on-demand facilities provided by the lender and should include thresholds defined accordingly.
A loan agreement is a very complex document that can protect both parties involved. In most cases, the lender establishes the loan contract, which means that the task of including all the terms of the agreement rests with the lender. If you haven`t already signed credit contracts, you`ll probably want to make sure you understand all the components so that you don`t be able to protect yourself during the loan term. This guide can help you create a solid credit contract and understand more about the mechanics behind it. Interest is due at the end of each interest period, interest periods may be fixed periods (usually one, three or six months) or the borrower can choose the interest period for each loan (the options are usually one, three or six months).