Elements that the loan agreement should contain

When borrowing money – be it from a loved one or a friend, or from a loan company – you will need to draw up a written transaction agreement. In the event of any ambiguities or complications, it will be the basic evidence in which all loan parameters and obligations of both parties have been recorded.

So remember that this transaction should be documented in an appropriate manner. To this end, I have prepared a list of all the elements that must be included in the loan agreement. By familiarizing yourself with them, you will know what the contract should contain so that you can feel safe

Money loan agreement – what is that?

Money loan agreement - what is that?

In art. 720 § 1 of the Civil Code, there is a definition of a loan agreement. It is clearly stated that through the loan agreement the lender undertakes to transfer the ownership of the recipient a certain amount of money […] and the recipient undertakes to return the same amount of money. 
§ 2 is also important, in which it is clearly stated that the loan agreement with a value of min. PLN 1,000 should be made in writing. So, for your own safety, make sure that such a contract is drawn up and contains all the necessary elements.

What should the loan agreement contain?

Before you sign any loan agreement, check that it has been drawn up correctly. For this purpose, read it carefully, checking whether it contains the answers to all the following questions.

Where and when was the contract concluded?

At the very top – in the upper right corner or in the first sentence should be the date and place where the contract was concluded. It is important that the date is current, as from this day the withdrawal period will be calculated. Do not sign the document with a retrospective date, as it may work against you.

Who and with whom does it conclude a money loan agreement?

The next element is to define the parties to the contract. The lender’s and borrower’s personal data must be included here. A natural person should provide their name, surname, home address, social security number and the number and series of the identity document. The loan company should provide its full name, exact address of the registered office and registration data, i.e. KRS, NIP, REGON.

For what amount and for what repayment period was the loan concluded?

It is necessary to present the subject of the contract. In the case of a loan, this will be the exact description of the product you are applying for. The lender must therefore provide the amount and repayment period of the loan. If you want to receive a quick cash loan of PLN 1,500 for 30 days, these are the parameters that must be included in the contract.

How long is the contract valid for?

Here the lender is required to provide the total duration of the contract. What does it mean? The date on which the contract will apply. Usually, the start of the contract is the day the loan is disbursed and the end of the contract is the repayment date of the last installment.

How much does the loan cost?

Remember that the cost of the loan is not just interest and commission. There may be a number of other costs that you will be required to cover. In this paragraph of the contract, the actual cost of the loan must therefore be clearly stated:

    • interest,
    • commission,
    • registration fee,
    • possible preparation fee,
    • possible operating fee,
    • possible costs for additional services,
    • costs associated with any insurance,
    • total cost of the loan,
    • total amount to donate.

Interest-free loans without interest are also available on the market, available to new business clients, in which case the costs will be 0 PLN.

How to return a loan?

It is required to provide information on the number and amount of installments, the currency of the loan, repayment schedule and method of repayment. In the repayment schedule you will find a detailed breakdown of the repayment dates and amounts for each loan installment. In this paragraph you will also learn how you will pay off your liability. If you have chosen to repay to your account, you will see there all the details needed to make the transfer: the lender’s bank account number, name and title of the transfer.