Acceleration – A clause in a loan agreement that protects the lender by requiring the borrower to immediately repay the loan (both the principal and all accrued interest) if certain conditions occur. Relying solely on a verbal promise is often a recipe for a person who gets the short end of the stick. When repayment terms are complex, a written agreement allows both parties to clearly specify the terms of payment in instalments and the exact amount of interest due. If a party does not fulfill its part of the agreement, this written agreement has the added benefit of having recalled the understanding that both parties have consequences. Depending on the loan selected, it is necessary to draw up a legal contract specifying the terms of the loan agreement, including: a person or organization that practices predatory lending by imposing high interest rates (known as a “usurer”). Each state has its own interest rate limits (called the “usury rate”) and usurers illegally calculate higher than the maximum allowable rate, although not all credit sharks practice illegally, but instead fraudulently calculate the highest interest rate, which is legal under the law. Simply put, consolidating is taking out considerable credit to repay many other loans by having to make only one payment per month. This is a good idea if you can find a low interest rate and want simplicity in your life. Not all loans are structured in the same way, some lenders prefer weekly, monthly or any other type of preferential schedule.
Most loans usually use the monthly payment plan, so the borrower must, for example, pay the lender on the 1st of each month, while the full amount is paid until January 1, 2019, which gives the borrower 2 years to repay the loan. For more information, read our article on the differences between the three most common forms of credit and choose who is right for you. A credit agreement is a written agreement between a lender and a borrower. The borrower promises to repay the credit according to a repayment plan (regular payments or lump sum). As a lender, this document is very useful because it legally obliges the borrower to repay the loan….