Loan Agreements


We can find two basic types, namely, the bailment, if what is presented is a non-fungible thing for a certain time, being free or, on the contrary, in the loan of fungible things with the obligation to return another one of the same kind and quality, which can be done for free or with an agreement to pay interest, in which case it is called a simple loan.

For the purposes of illustration, the most relevant data in a loan contract are given below:

Lender: a person who lends.

Borrower: person who receives the loan.

Principal of the loan: amount actually delivered by the lender.

Loan repayment term: time interval in which they are obliged to repay the principal of the loan.

Loan interest: the price for the loan of the principal.

Loan interest rate: configured as the percentage on the principal. This percentage can be freely set by the parties or be based on one of the officially published percentages.