To stay clear of any legal involvement, both parties concerned must comply and honor all agreements made. Since the loan agreement serves as a contract and legal documentation, a violation of the terms and agreements can lead to a legal case and the written agreement can function as proof in court.
The third section is dedicated to the specifics of the loan transaction; it contains the responsibilities of the borrower and the lender, the measures to be undertaken in the event of the borrower's inability to repay the loan; there is also information on the extent to which changes can be made to the agreement. The third section is drawn up after detailed negotiations between the lender and the borrower.
"Insurance" organizations, who collect premiums for providing either life or property/casualty coverage, created their own types of loan agreements. "Banks" and "Insurance" organizations loan agreements and documentation standards evolved from their individual cultures and were governed by policies that somehow addressed each organizations liabilities (In the case of "banks," the liquidity needs of their depositors; in the case of insurance organizations, the liquidity needs associated with their expected "claims" payments).
Though you might be taking the loan for emergency, it is quite important that you should check the various alternatives for the loan before deciding on the final selection. In general, the loan agreement should contain various fees that would be charged for the loan being credited into your account which is called as the processing fee.
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