As a precautionary step, it is important to make a person to person loan agreement when giving or receiving a loan. Money matters, sometimes they don’t look at friends or not, especially for a fairly large nominal. If a friend or relative who is being loaned is in good faith, then they will not mind signing this letter.
Actually, if you want to make an oral agreement, as long as there are witnesses who see and know the debt and credit agreement, it’s okay. However, the most recommended proof of civil law is written evidence because creditors do not have to have trouble finding the witnesses involved. This means that if there is a dispute, documentary evidence is more reliable.
In general, a debt agreement is a written rule that is official in nature and contains everything related to the debt and the credit being carried out, including the two parties involved, when the debt is received and returned, and the amount of debt owed.
Writing a Person to Person Loan Agreement
There are several things you need to pay attention to when writing a loan agreement. This letter is a formal document, so you can’t write it carelessly. There are rules that you must follow so that you can use this letter properly.
What to Include?
This letter must contain information regarding the type of letter as the title at the top, date, number, and attachment. Meanwhile, the body of the letter contains information about the party making the agreed statement and agreement. For more details, here are the components that must be included in a person to person loan agreement:
- Personal data of the first and second parties as lenders and recipients of the loan. Personal data includes information on name, place, date of birth, address, and occupation.
- A statement regarding the amount and purpose of the loan as well as when the debtor is to receive the loan.
- Information regarding the debt repayment mechanism and the repayment period in accordance with the agreement of both parties. Also include a grace period, if needed.
- Information on collateral in the form of borrower assets, such as houses, cars, and others that will be submitted if the borrower fails or does not pay the loan.
- The amount of compensation received by the lender is based on the agreement of both parties.
- Problem – solving mechanism in case of disputes or differences in interpretation between the two parties.
Purpose of the Personal Loan Agreement
A person to person loan agreement letter can provide peace to the parties involved because this it has legal force. So, if unexpected things happen, the related parties can legally settle the case in legal channels.
In a loan agreement letter, the personal data of the parties involved are stated in accordance with the identity of their respective Identity Cards. This is to avoid mistaken identity or the possibility of irresponsible parties avoiding paying off the loan.
The agreement letter also contains the amount of the loan provided by the creditor, as well as the time the transaction is carried out. That way, neither party can cheat or change the nominal value in the debt agreement.
In the event of a dispute or disagreement, both parties can immediately refer to the loan agreement that has been made, so that the problem can be resolved more quickly. That’s why you need to consider a person to person loan agreement before giving a loan to anyone.