The statutory definition of a loan agreement determines what constitutes its component parts and without which we can not talk about a loan agreement. Among other things, it emphasizes the purpose of the loan . The loan agreement is a bilateral agreement, concluded in writing, indicating the purpose of the loan . It contains commitments for both parties. But from the beginning. More commentary at customvmail.com
Who Will Give Us Credit
The loan agreement is concluded between the bank and the borrower. In addition, credit can also be granted to credit unions. In addition, all other institutions are non-bank institutions and provide loans. The Bank and Credit Unions may grant loans with funds not owned by them. Non-bank institutions can give loans if they own the borrowed money. Regardless of what the purpose of the loan is , we can only apply for it at a bank or SKOK.
Purpose of the Loan
By concluding a loan agreement with the borrower, the bank provides cash that must be spent in accordance with the purpose of the loan . We can not take a car loan, and in fact spend the funds to renovate the flat. One of the loan agreement’s terms is precisely the purpose of the loan. Taking a loan for a specific purpose, we have to stick to it strictly.
Bank Is the Dominant Party
In this relationship, the bank is the dominant party. This is manifested in the fact that he has the ability to control. It may control, among other things, whether the borrower uses the money from the loan in accordance with the purpose set out in the contract.
What Is the Purpose of The Loan
The purpose of the loan is as set out in the contract. Most often we meet with:
housing loan – the purpose of the loan is to buy a flat or a house,
construction loan – the purpose of the loan is to build a house,
car loan – the purpose of the loan is to buy a car,
a working loan – the purpose of the loan is the current needs of the company,
investment loan – the purpose of the loan is investment aimed at the development of the company,
consolidation loan – the purpose of the loan is to combine all previous liabilities into one in order to reduce the monthly installment by extending the loan period, E.t.c.
Cash Loan for Any Purpose
However, we can observe a different situation in the case of a cash loan for any purpose. As the name suggests, the purpose of the loan is optional. This means that the loan agreement does not specify in your decisions what money from the loan is to be spent on. As the borrower, we are free to spend funds that the bank gives us to use.