Depending on the financial institution, several lenders require you to provide some specific documents in order to access their loan offerings. And if you do not provide these documents in the right format, or if incorrect, your loan may be denied. In this article, we will discuss explicitly how to prepare some important loan documents that they may require of you.
How do you write a Personal loan agreement?
A personal loan agreement is a promissory note or contractual agreement between you and the lending organization. In fact, it could even be between you and another person. This document is needed to formalize the specifics of your loan. Personal loan agreements are usually unsecured. This means you do not have to give something valuable in return as collateral if you default.
To write an excellent personal loan agreement, it is imperative that you follow these procedures.
- When starting the document, the first thing you must write is the date. This must be at the top of the page. If the document is an informal personal agreement before they pay you the loan, fill in the date you receive the money.
- The next thing after the date is the Terms of the Loan. This must contain the terms for repaying the loan and the personal payment agreement. For example, if you are lending #50,000 for a specific need and you desire to repay #10,000 a week, you will state this in the body of the agreement. E.g. I Samuel Lawrence, understand and I agree that I owe, XYZ lending company a sum of #50,000. I agree to repay this loan back #10,000 per week until I fully settle the loan.
- After the terms of the loan, the next thing is to write your proposed date of repayment. Something like “Repayment of this loan will begin on the first Saturday of every week of January 2021 and be completed on the last Saturday of January 2021.
- Statement of Agreement: This section of the document places emphasis on the agreement between the two parties involved in the loan deal. “The borrower and the lender, hereby agree to the terms and conditions stated in this document” You should put this just a few lines below the repayment schedule.
- Signature: The signature is very important in any contractual agreement. Without the signature, the agreement may be hard to enforce. Therefore, ensure you leave a space for both parties involved to sign the agreement.
How do I write a Personal letter of application for a loan?
There are several reasons for requesting a loan. This could be to cater for your business, family need, purchase an item, etc. A loan application letter is a request that you write to the financial organization to which you are requesting a loan. This letter helps the organization to make a decision as to whether to approve or disapprove your loan request. When writing this letter, it is important that you follow the right procedure. You must write with the right tone and also in the right format. Additionally, you must also ensure that you are honest with the information you provide. This is because the financial organization might cross-check to confirm the validity of the information you provide.
To write a loan application letter, you must follow the following:
- Address the letter to the financial organization you are lending from.
- Input your name and address on the application form
- Add your date at the top of the document.
- State the intent of your letter. For example, I have been an active customer (your account details) in your bank for (state the years). I wish to apply for (write the type of loan you are applying for). This should be followed by the purpose of the loan (what you wish to use the loan for)
- Close your letter with “Yours Sincerely”
- Date and signature
Conclusion
We cannot underestimate the importance of loan documents. They are important in helping you secure that loan offer. Leverage all information in this article to prepare an excellent loan document.
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