It offers a fixed interest rate and flexible credit terms, but this type of loan has a higher interest rate than a direct loan. Parents would usually only get this credit to minimize the amount of their child`s student debt. The term “secure” means that the borrower must deposit collateral such as a house or car if the loan is not repaid. Therefore, the lender is guaranteed to receive an asset from the borrower if it is repaid. In general, a credit agreement is more formal and less flexible than a debt instrument or IOU. This agreement is typically used for more complex payment agreements and often offers the lender greater protection, such as borrower guarantees and borrower guarantees and agreements. In addition, a lender can usually accelerate credit in the event of an event of default, that is, when the borrower misses a payment or goes bankrupt, the lender can immediately make the full amount of the loan, plus any interest due and payable. A simple credit agreement indicates the amount borrowed, the interest due and what must happen if the money is not repaid. For more information, read our article on the differences between the three most common forms of credit and choose who is right for you. It`s easy to make a credit agreement with Rocket Lawyer.

Just answer a few critical questions and we`ll create the right legal language for your contract. Before you write your own credit agreement, you should know some of the basic details that are included….