Service of drafting loan contracts and security measures when lending

Article overview

The loan contracts and security measures when lending are two essential elements in financial transactions. The more you understand the regulations on property loan procedures as well as the loan contract drafting process, the better your rights will be guaranteed. Through the following article, let’s join Long Phan to learn about the process of drafting loan contracts and security measures when lending.

What to do when drafting loan contracts and security measures when lending
What to do when drafting loan contracts and security measures when lending

What should you keep in mind when lending money? What is the interest rate threshold when lending money?

When lending money, there are some things to pay attention to so that businesses do not violate the law and get “debt defaulted”:

  • Loans at prescribed interest rates;
  • When lending money, a loan contract must be drawn up;
  • Use debt collection methods by the law;
  • Note on keeping the borrower’s identification documents;
  • Should agree on the loan repayment period;

According to Article 468 of the Civil Code 2015, the provisions on loan interest rates for parties when there is an agreement are: In case the parties have an agreement on interest rates, the agreed interest rate must not exceed 20%/year of the loan money, unless other relevant laws provide otherwise.

In case the parties have an agreement on interest payment, but the interest rate is not clearly defined and there is a dispute over the interest rate, the interest rate is determined at 50% of the interest rate limit above.

Some security measures when lending.

Pursuant to Article 292 of the Civil Code 2015, measures to ensure the performance of obligations when lending include:

  • Pledge assets.
  • Mortgage of property.
  • Deposit.
  • Sign a bet.
  • Escrow.
  • Ownership reserved.
  • Guarantee.
  • Trust.
  • Holding property.
Deposit is one of the security measures when lending
Deposit is one of the security measures when lending

What content does the loan contract include?

Pursuant to Article 463, Article 464, Article 465, Article 466 of the Civil Code 2015, the content of the loan contract includes:

  • Personal information of lenders
  • Loan asset (if it is money, it is the loan amount);
  • If the loan asset is an object other than money, the contract will have the characteristics and quantity of the loan asset;
  • Loan term;
  • Interest rate and time of interest payment;
  • If the loan asset is an object, the contract may include an agreement to use and exploit the asset;
  • Form of loan security
  • Payment method
  • Rights and obligations of the parties
  • In case of contract termination, contract extension
  • Handle disputes and fine violations. compensation
  • Other related issues

Things to keep in mind when drafting loan contracts and security measures when lending

When drafting loan contracts and security measures when lending, the following issues should be kept in mind:

  1. Form of contract: Although the law does not require any form, the parties should still draw up the contract in written form.
  2. Regarding personal information of the parties: If the information of the parties is incorrect, it will affect the validity and enforceability of the contract, and they may not even be able to request the return of loan assets.
  3. Information about loan assets: This information indicates the subject of the contract, so that if a dispute arises, the lender will have a solid basis to require the borrower to repay the correct asset.
  4. Interest rate: The interest rate must not exceed the provisions of law and should be clear, including the interest payment period.
  5. Security measures: It is necessary to choose appropriate security measures because each type of security measure will have different characteristics and notes for asset security.
  6. Rights and obligations of the parties towards the lender and the lender.
  7. Loan term: The loan term should be reasonable so that the borrower of the asset has the conditions to properly perform his/her obligations, and at the same time the lender has a basis to require the other party to complete his/her obligations when due.
What should you keep in mind when drafting loan contracts and security measures when lending?
What should you keep in mind when drafting loan contracts and security measures when lending?

Support services for drafting loan contracts and security measures when lending

Drafting a loan contract and choosing the right security measure to include in the contract are two steps that require a deep understanding of civil law and related regulations. Therefore, if you are looking for a reliable contract drafting procedure consultant, you can refer to the services at Long Phan. We will provide customers with a comprehensive service package, including:

  • Support in collecting information about the borrower and the legality of the transaction object;
  • Consulting on legal issues related to drafting loan contracts and security measures when lending;
  • Prepare documents and draft documents related to drafting loan contracts and security measures when lending;
  • Consulting and guidance on implementing security interest registration procedures
  • Consulting on effective solutions when the borrower violates the contract
  • Support for other arising legal issues (if any).

If you need assistance in drafting loan contracts and security measures when lending, please contact Hotline 0906735386. Long Phan is always ready to assist you in completing procedures quickly and effectively.