Effective date: This is the date on which the money is paid to the borrower. The date you sign the loan agreement is usually the date of validity. Read on to learn more about the most important aspects of a commercial credit contract. In the area of interests, insert information for any interest. If you don`t calculate interest, you don`t need to include this section. However, if you are, you must specify when the interest on the loan will be collected and whether the interest will be simple or assembled. Simple interest is calculated on the principal unpaid, while compound interest is calculated on unpaid principal and any unpaid interest. Another aspect of interest you need to have in detail is whether you have a fixed or variable interest rate. A fixed-rate loan means that the interest rate remains the same for the duration of the loan, while a variable rate loan means that the interest rate may vary over time depending on certain factors or events. There is always a high probability that there will be a misunderstanding and disagreement with this type of loan. Given the fact that this loan was not made through a legitimate channel. It is always a good thing to use a credit note to track the repayment of the loan by both parties.
In addition, you should include an additional portion as a witness to prove that the lender gave this money to the borrower in accordance with the agreed terms. It is also a good thing to involve the witness in the payment of credit rates. The receipt should consist of the signature of the witness and fingerprints for all parties involved on the receipt. Amount: This is a mandatory portion of this receipt. The amount paid must be shown on the receipt. Borrowing is an important obligation, regardless of the amount, which is why it is important to protect both parties through a loan agreement. A loan agreement not only describes the terms of the loan, but also serves as evidence that money, goods or services were not a gift to the borrower. This is important because it prevents someone from getting out of the refund by claiming it, but it can also help you make sure it`s not a problem with the IRS afterwards. Even if you think you may not need a credit contract with a friend or family member, it`s still a good idea to have this in place just to make sure there`s no problem or disagreement about the terms later that could ruin a valuable relationship.