The need to take out a cash loan can overtake absolutely every person. However, there may be many reasons to choose such a method of enrichment.
For most of us, a loan is the only chance to get out of a difficult situation and solve financial problems. Not everyone has rich relatives who are always ready to help or impressive savings on bank account.
Often a loan is an option that has no alternative. It is clear that the debts will have to be repaid, but they will only be credited to the bank account after the signing of the loan agreement. Here's what you need to know about a loan agreement (Philippines).
Loan agreement Philippines: what the borrower needs to know
A loan agreement is an agreement between two parties – the recipient (the borrower) of the loan and the organisation issuing it. By signing such a document, each of them assumes certain obligations. The lender – to provide the borrowed funds, and borrower – to pay the loan in accordance with the terms of the contract.
Everyone should always carefully read the terms of the agreement
By signing any agreement, including a loan agreement, the consumer automatically agrees to all its terms. However, not all citizens delve into the essence of the contract, putting their signature under it. In turn, consequences may lead to unexpected problems.
To increase awareness, the cover page contains basic information about the loan and the text of the agreement is outlined in an accessible manner. Thus, the borrower must receive full information about the main terms of the loan before singing a loan agreement.
The contract must contain:
- the amount and term of the loan;
- the amount of the interest rate;
- the amount of the annual interest rate;
- method of repayment;
- the rights of the borrower to partial or full early repayment of the principal debt;
- the amount of the penalty for violation of obligations under the contract.
Termination of a loan agreement in the Philippines
Each of the participants of the deal has the right to terminate this agreement. Of course, under certain circumstances. In turn, this can be demanded not only by the one who provided the borrowed funds, but also by the one who received them. The borrower has the right to terminate the agreement signed by him or her if the lender has violated any of the terms of the loan agreement. Lending companies most often react negatively to such statements and borrowers often have to go to court to cancel the loan agreement. And the outcome of the case in such situations depends on the reasons why the borrower wants to terminate this deal.
Furthermore, the lender violates the terms of the agreement if he makes changes in a document without the consent of the borrower. For example, when the lender increases the current rate or changes the loan repayment scheme. In addition, a good reason for terminating a loan agreement is a violation by the lender of the procedure for providing borrowed funds. In particular, when the lender does not issue a loan in full, but only a part.
