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A loan contract, also called a loan agreement, is a written contract between two parties: a borrower and a lender. Loan contracts can be used in many different situations, such as for real estate, automobiles, and other items or goods. The agreement will protect both parties in the event of dispute, so it is important to have a written contract secured as opposed to simply making a verbal agreement.
The loan contract will require detailed information about the financial transaction being made. This includes the purpose of the loan, the length of the loan term, the interest rate, and the monthly payments due for this loan. Information about both parties should also be included as well. Both parties should sign the contract in order to move forward in the loan process, and a copy of the contract should be kept by the borrower and lender.
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