An example of a payment agreement template is used when you want to legally bind a creditor (lender) and a debtor (borrowers) (borrower). Payment contract or installment agreement are other names for this document, which defines the terms and conditions of a loan between these two parties.
Our free payment agreement template can be used to establish crucial details such as loan payment schedules, loan amounts (also known as deficiencies), payment methods, and personal information on both the debtor and the creditor’s sides of the transaction.
Afterward, you may sign it and email it to the other party using the SignEasy service. Finally, save the legally enforceable payment agreement form as a PDF and put it in a secure place in your files for future reference.
When to use a payment agreement template
When you need to acknowledge the completion of a loan transaction, a payment agreement form can be quite useful.
Use this template in the following situations:
You are extending a loan to a third party.
You have been the recipient of a loan of some sort.
You’d like to keep a record of a payment schedule or amortization table for future reference.
When there is money involved, it is best to keep detailed records of the transactions that have been agreed upon by both parties. This increases the faith of both the lender and the borrower in the arrangement.
Keep in mind that you should always have a legal counsel review a payment agreement. You’ll want to make sure that your contract complies with all applicable legal requirements in your state, as each state has its own set of rules governing these types of agreements.
How to execute a loan agreement
It is customary for people to borrow money from either an individual (such as a friend or acquaintance) or a financial organization (say, a bank).
Following are the actions that must be taken when engaging in a loan arrangement, regardless of the source of the money being borrowed:
Procedure Step 1: A payment agreement contract is requested to be drawn up by either the borrower or the debtor. It is customary for businesses to write loan agreements when lending money to other businesses. In all other cases, either party can develop the documentation.
Step 2: If you are applying for a loan from a bank or other financial institution, you will be required to present supporting financial statements so that they can have an understanding of your income and assets.
Step 3: The borrower and the lender agree on the amount and timing of the payments.
4) The party responsible for creating the agreement (again, generally the creditor) completes the agreement by filling in all of the relevant information and then sends it to the debtor via an eSignature service such as SignEasy. Click here to get a simple payment agreement template that may be printed.
Step 5: The debtor signs the agreement and returns it to the bank or the creditor, as appropriate.
What to include in a payment agreement template
Following our understanding of the document’s approval process, let us become more acquainted with the main components of a payment agreement template.
What information should be included in a payment agreement template?
Even if you opt to utilize our free payment agreement form, it is critical that you comprehend the numerous provisions contained inside this contract. You will be able to pick which provisions to preserve and which ones do not apply to you in this manner.
Covering the basics
As is customary in most contracts, the first stage is to introduce the individuals who will be involved. In the case of a payment agreement, both the debtor and the creditor will be parties. Make certain to include their full legal names, mailing addresses, and other identifying information.
Then make a list of who owes someone money, how much they owe them, and whether or not interest will be charged.
Recognize that there is a shortfall
This clause is pretty obvious in its construction. Explain that the creditor is owed the deficiency by the debtor in any situation.
Make it clear that the debtor has not been pressured or deceived in any way.
Occasionally, the debtor is confused or uncomfortable with the payment terms, and as a result, he or she is pushed into signing the paper. In this provision, the debtor acknowledges that he or she did not feel pressured into signing a contract that they believe is unfair.
Creating a payment plan and method is essential.
You will address the fact that both parties have agreed to the payment plan in this area. This document also confirms to both parties that the debtor agrees to pay following the payment plan, and that payment will be made by or before the due dates specified in the agreement. To accomplish this, a thorough payment plan should be included with this agreement.
You should also make a note of your chosen method of payment, which could be cash, check, internet transfer, or any combination thereof.
Infringement on a contract
If the borrower fails to pay his or her portion of the loan on time, spell out what will happen next. If there is a 10-day default, the creditor might demand that all of their money be returned in one payment, or that they be charged additional interest calculated based on the delay (monthly, weekly, etc.).
Acknowledgment and signature
In this section, we define the terms and conditions that are commonly found in contracts, such as the following:
Assumption of Risk: This clause relieves the Debtor of any penalties or defaults relating to this loan that may have occurred before the execution of this agreement.
Rights are assigned when a creditor grants permission to a third party to take over the rights and obligations arising from this arrangement on his or her behalf.
Changing the terms of the agreement: If any party intends to make any changes to the agreement, they will need to do so in writing, with both parties acknowledging and accepting the changes.
Severability means that even if one element of the agreement is found to be invalid, the rest of the agreement will continue to be legitimate.
Applicable law: This provision specifies which state’s laws are to be applied in the event of a dispute.
Signature and acknowledgment of receipt
This section serves as evidence that both the borrower and the lender agree with the conditions of the contract. An agreement can be signed and then sent to the other party for signature using a mobile-based eSignature system like SignEasy.
Annex to the payment plan
The payment agreement contract is built around this idea, which serves as its foundation. It specifies when the borrower will pay, how much he or she will pay, and how he or she will pay.
There could be a due date specified in the payment plan, indicating when the deficiency must be paid on its whole.
SignEasy helps you seal the transaction.
You can upload this template to SignEasy instead of printing, signing, scanning, and submitting it as an email attachment, which will save you time and effort. From there, you may use your mobile device or computer to enter all of the relevant information, sign it electronically, and send a link to the other party to complete the signing process.
SignEasy also makes it possible to track when a document has been signed, preventing it from becoming lost in someone’s mailbox. As soon as it’s finished, save it to the cloud for future reference.
SignEasy also allows you to include your logo on documents that you send out for signature, providing an additional layer of validity and uniformity.
Do you want to get your first several payment agreement templates signed for nothing? SignEasy is available to you for free for 14 days!
Payment plan annex
It is possible to offer a payment arrangement as evidence if there are any problems with the repayment of a loan in the future. Continue reading to gain more insight into how to create a legally binding payment agreement.
What is the proper way to prepare an agreement letter?
Open our simple payment agreement template in SignEasy to see what it looks like.
Fill in the blanks with the pertinent information about your transaction.
Sign your name on the dotted line using an eSignature.
To complete the process, click “Finish.”