How to make a credit agreement
Posted on Dec 3, 2000 08:15:27 AM
Making a credit transaction occurs by signing a credit agreement between the lender and the borrower. With commercial lending relationship is often made out of simple or discharge of the bill.
The most complicated legal document is a bank credit agreement. In the loan agreement are recorded all the basic credit terms that were at the stage of decision-making: the purpose, date, size, interest rate, the mode of using the loan account, repayment of principal and interest on, the types and forms of verification software, the amount of information provided by the borrower, as well as other conditions.
Contract for a loan is made only in writing. If the borrower agrees to the terms of the loan, it transfers to the bank confirmed, after which it is believed that the loan agreement shall enter into force.
The bank for monitoring compliance with the terms of the contract and the progress of loan repayment formed a special credit file, which is concentrated all the documentation on the credit transaction and all the necessary information about the borrower. Documents are grouped as follows:
■ material on loan: A copy of the credit agreement, bond, letters of guarantee, etc.;
■ the financial and economic information: financial statements, analytical tables, tax returns, business plan, etc.;
■ materials on the creditworthiness of the client: analytical reports credit agencies, information obtained from other banks, telephone calls, etc.;
■ documents for the loan: the certificate of pledge, transfer document on deposits and securities, mortgages, etc.;
■ Correspondence credit: correspondence with clients, records of telephone conversations, etc.
The lender and the borrower enter into an agreement of credit, which the contracting parties assume mutual obligations. Creditor bank is obliged to provide funds to loan again ¬ extent and under the conditions stipulated in the contract, and the Borrower to repay the amount of money and pay interest on it.
Under current law the credit LIMITED contract must be in writing, otherwise it will be invalidated.
The structure of the loan agreement the law does not reglamen ¬ preted, and in practice it has the following sections:
1. chapeau;
2. general provisions;
3. subject of the contract;
4. credit terms;
5. conditions and procedure for settlement;
6. rights and obligations of the parties;
7. other conditions;
8. Legal address
9. details and signatures of the parties.
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