A credit agreement is an essential document if you need to borrow or borrow money, for example when you are starting a business and need working capital. A credit agreement clearly describes how and when credit is repaid, ensuring that both parties are protected during the credit process. You will find a standard agreement especially for lending to friends or family in our library. It compensates for the need to be formal enough for the borrower to know that the loan is not charity, with simple language, so that the agreement does not seem “excessive” in the situation where the lender and borrower know each other well. If you need an agreement with more protection for the lender, please refer to other documents in this file, especially the abridged version of the credit agreement. Another step would be to take some form of credit guarantee – see secured credit agreements. This private credit agreement should be used in the simplest situations, for example when one family member lends money to another or when money is borrowed between friends or colleagues. This subfolder contains long and short versions of credit agreements. These agreements contain a number of provisions, including clauses on interest and reimbursements, as well as detailed provisions on insurance and guarantees, insurance and liabilities.
The short-term credit agreement does not have the same degree of detail or protection and is suitable for less complex transactions. Simple interest rate calculations are usually the best, and the simplest is a fixed amount over the term of the loan, for example, if someone lends you £4,000, you can calculate £200 interest that needs to be repaid in equal instalments over 10 months (they pay £420 per month for 10 months to borrow £4,000). . . .