Step 1: The borrower or debtor requires the conclusion of a payment contract. If it is a loan from a company, the company will usually draft the agreement. In all other cases, either party can create the document. Our free payment agreement template can be used to describe important details such as loan payment plans, loan amounts (also known as defaults), payment methods, and personal information on behalf of the debtor and creditor. This plan is the basis of the entire payment contract. It describes when the borrower will pay, how much and by what method. In this section, we define the provisions contained in most contracts, such as: In the event that the DEBTOR does not make the payment, if he reaches fifteen (15) days after the scheduled payment schedule, the total amount of the default becomes due and recoverable. Any further breach gives rise to the creditor`s right to claim damages. Are you ready to draft your contract, but don`t know what to include? Here are the steps to follow to prepare a secure payment contract: Regardless of the source of the loan, here are the steps to follow when entering into a loan agreement: The CREDITOR may transfer or assign this agreement to a third party, provided that written notice is given to the DEBTOR. In the event of such an assignment, the assignor may change the payment schedule set out in this Agreement.
When payments are made and how they are made There may be cases when the borrower is not able to pay on time. When this happens, the agreement must include information on what to do. As a lender, you can ask the borrower to pay a penalty for late payment. Alternatively, you can also set up a process to deal with late payments. You can either set a grace period or charge a penalty fee immediately if you receive a late payment. In the event that the debtor party fails to make payments in accordance with the payment schedule, the total amount of the default becomes due and payable immediately after the expiration of the ten (10) days following the failure to make such a prescribed payment. A payment agreement template is what you use when you want to legally bind a creditor (lender) and a debtor (borrower). Also known as a payment contract or instalment payment agreement, it describes the terms of the loan between these parties. Even if you choose to use our free payment agreement template, it is important to understand the many clauses of this contract. This allows you to decide which regulations you follow and which do not apply to you. Then you can sign it and send it to the other party with Signeasy.
Finally, save the legally binding payment agreement document in PDF format and save it to your files to keep it safe. Both parties would have already agreed on the terms of payment, so write them all down in the document. This is important so that if one of the parties does not follow what is written, you will have documented evidence. Payment terms are important so that borrowers and lenders know what to expect. This section is proof that the borrower and the lender accept the terms of this Agreement. You can use a mobile e-signature solution like Signeasy to sign an agreement yourself and then send it to the other party for signature. Step 4: The party responsible for drafting the contract (again, this is usually the creditor) fills in all the necessary information and then sends it to the debtor via an electronic signature solution such as Signeasy. For a simple printable payment agreement template, click here. It is also very important to indicate the total amount of money that has been borrowed.
This is done so that the amount is clear to both parties and neither party can claim anything else. If there is no interest, add this information as well. You can include it in the total amount or in the fixed payments to be paid according to the agreed schedule. The debtor shall explain and justify this payment plan, which has been drawn up in such a way that it can make the necessary payments without causing further debts or disadvantages. A payment agreement is a legally binding contract between a lender and a borrower whereby the parties agree on a mutually acceptable repayment plan. The document then serves as a receipt and includes loan details, interest rates, and payment terms. Payment is preferably made to the CREDITOR in accordance with the manner indicated in the payment plan, but in any case the DEBTOR may choose his method of payment at will. These are the most important components. Include them all in the document you write, especially if you think they are all applicable to your agreement. You can think of other components that you want to include, which is good.
But make sure you don`t miss anything important. Now that you know all the components, let`s go over the reasons why you need to create such a document or contract. Customize our free indemnification template to instantly create a PDF disclaimer agreement. Sign them with legally binding electronic signatures. Would you like to sign your first payment agreement templates for free? Try Signeasy for free for 14 days!. This information is relevant to both the lender and the borrower. You can provide general details about when payments need to be paid and how they are paid. If you can, create a detailed payment plan and attach it to the document. This will be more effective so that the borrower knows his responsibilities and the lender knows what to expect. Note: Always have a payment agreement reviewed by legal counsel. Each state has different rules that govern these types of agreements, so you need to make sure your contract meets the required legal requirements.
With our drag-and-drop PDF editor, you can easily customize your payment agreement template to include the specific terms of the loan. Feel free to represent your business by adding your logo and updating fonts and colors to match your brand image. .