About the Loan Agreement (also for Debt/Equity rules)

Is a family member asking to borrow money from you? Have you heard all the stories about people forgetting that they borrowed the money from you?

Did you lend a chunk of money to your son who is now getting divorced? Don't want half this money to go to the daughter-in-law?

Did your dad lend money to your brother? Is your dad now dead and there are no records of that loan? Is there embarrassment, confusion and anger?

Have you lent money to your company? You need to document that agreement before the Debt/Equity rules begin to operate.

Avoid the nightmare. Do up a Loan Agreement before it is too late. This kit is even suitable for inter-company loans.

This Loan Agreement is designed to protect the Lender's interest and should only be completed by the Lender.

Debt/Equity rules. If you need a loan agreement for the Debt/Equity rules then just follow the hints along the way.

Why is their a pre-contract agreement - is that to comply with the Consumer Credit laws?

That is correct. When you purchase a Loan Agreement you also get, automatically, a "pre" loan agreement. It is like another agreement that you sign - before you sign the actual Loan Agreement.

Some people don't like this additional amount of paperwork. Some people get angry with a big thick document when you just want to put a simple Loan Agreement in place. That is a question that you should take up with your local member of parliament.

If you don't complete the pre-contract agreement then your loan may not be enforceable at law. Sure, some people don't need to complete the "pre" loan agreements. Some people are exempt. However, rather than go down that road we get everyone to complete this "pre" loan agreement.

The Loan Agreement and the pre-contract agreement comply with the Credit Act 1984, Credit Sale Contracts and Continuing Credit Contracts. It also complies with the Consumer Credit Code. The Consumer Credit Act started on 1 November 1996. The act applies to the Consumer Credit Code, which is uniform in all States and Territories with minor differences in Western Australia.

The Code regulates all credit providers, including banks, building societies, credit unions, finance companies and payday lenders as well as stores, solicitors, accountants and individuals who provide credit and charge interest for the use of that credit.

How do consumers benefit? How is the pre-contract agreement meant to help?

The legislation aims to ensure that debtors are given sufficient information to make appropriate choices of credit products, and to be informed throughout the term of the contract of any changes to their obligations, and of the intended actions of the credit provider in relation to their loan.

There are very specific requirements in section 15 as to what information is to be disclosed to a prospective debtor before a contract is entered into with special focus on key financial information. These include:

- The amount of credit that is to be provided.
- The annual percentage rate or rates.
- How interest is calculated and debited.
- Total amount of interest, if the contract is to be paid out within 7 years.
- The credit fees and charges that are, or may become, payable under the contract.
- How the debtor is to be informed of changes.
- The frequency of statements of account.
- If a commission is to be charged, the amount and to whom it is payable.

Will this document fulfil your needs?

Would you like to know in advance whether this document contains all of the clauses and provisions you need?

Depending on how you answer the questions, there are many possible ways your final document will look. However, we have produced an example based on the most common answers.

To see a sample of what your ‘Loan Agreement (also for Debt/Equity rules)’ will look like, click here.

Note: The sample of your ‘Loan Agreement (also for Debt/Equity rules)’ may not be the complete document. Most of our samples only provide you with the first few pages of the document. If you wish to see the entire document, just purchase the document. If you are not happy with the document for any reason let us know and we will happily refund your money.

To view the sample of ‘Loan Agreement (also for Debt/Equity rules)’ you will need Adobe Acrobat.