Loan Agreement

- The laws of the province you select will be used to enforce this Agreement and will be used to help resolve any disputes.
- Often the Parties select the jurisdiction where the Lender resides. If the Loan Agreement relates to the purchase of certain assets, then the Parties may use the location of those assets.

Simple interest is calculated based only on the original loan amount. In contrast, compound interest is calculated based on both the original loan amount as well as the accumulated interest from previous periods.

- Once the lender gives notice to repay, the borrower must repay the loan within the specified number of days. This is also known as a demand Loan Agreement.
- If you are a borrower, you should give thought as to whether you will be able to repay the entire loan amount when the lender makes this demand. This form of arrangement may not be suitable for everyone.

- Having a larger final payment allows the borrower to make smaller monthly payments during the term of the loan.
- Before choosing this option as a lender, you may wish to consider the borrower's ability to make a large final payment.

- Collateral is an asset or property offered by the borrower to secure repayment of a loan.
- Securing the Loan Agreement with collateral allows the lender to receive compensation if the borrower fails to make payments. It's most useful when there is a high risk the borrower will default or there is a substantial amount being loaned.
- If the loan is not secured with collateral, the lender will need to go to court before seizing any of the borrower's assets.

No, you should not use real estate or land as collateral. This Loan Agreement will not give the lender a valid security interest in the real estate or land.

- Title of ownership refers to the legal ownership and possession of a piece of property.
- If the loan is a financial risk, the lender may wish to retain title of ownership until the borrower has made their final payment. If the lender chooses to transfer title of ownership right away, they will retain a security interest in the property until it's paid off in full.

Be as specific as possible in your description. If applicable, include the year, make, model, serial number, VIN or other similar details about the property.

Interest compounding is when the interest is calculated and then added to the original amount. The total amount of interest paid will increase the more interest is compounded.

- To reduce the chance of confusion, use plain language and do not abbreviate words.
- Write in complete sentences and keep your clause to a paragraph or less.
- Do not address or contract a term that has already been answered in the questionnaire.

While a witness is rarely required by law, it is a good idea to use a witness as having the signature(s) verified strengthens the evidence of a binding agreement, should a dispute arise. As well, if you are using the Loan Agreement for an uncommon purpose, it's a good idea to check the witness requirements of your jurisdiction.