Legally secure drafting of a (private) loan agreement

 

It is impossible to imagine our society and economy without loan agreements. These come in a variety of forms and enable purchases that would otherwise be impossible to make. Since loan agreements are often long-term and involve not inconsiderable risks for both sides, disagreements often arise over time, resulting in lengthy court cases. These can be reduced to a minimum by planning ahead.

There are many complex questions surrounding the drafting of loan agreements. Our law firm has often assisted clients in the drafting of loan agreements and thus laid a legally secure foundation for a dispute-free contractual relationship. If you have specific questions or would like us to draw up a legally secure loan agreement for you, please contact the law firm of hummelmann, von pierer und kollegen in erlangen.

1. What is a loan agreement?

A loan agreement is a contract between two persons in which one person, as the lender, provides the other person, as the borrower, with an amount of money. In return, the borrower pays i. D. R. An agreed interest rate and must repay the amount of money at the end of the agreed term or after termination of the loan agreement. As a rule, repayment is already made in installments during the term of the loan.

A distinction must be made between the "simple" loan agreement and the consumer loan agreement. This is the case if the lender is an entrepreneur and the borrower is a consumer. For this constellation special legal regulations apply for the protection of the consumer.

2. What form must a loan agreement take??

It depends on what type of loan agreement you have. The "simple" loan agreement can be concluded without any formalities by verbal agreement alone. There must be only two concordant declarations of intent, each of which must be received by the other contracting party. For reasons of preservation of evidence, however, these should regularly be set down in writing in the mutual interest of both parties.

In the case of a consumer loan agreement, the written form is required in accordance with the provisions of the law. § 492 BGB mandatory. In addition, the content of the contract must meet special legal requirements.

3. What information must be included in a loan agreement?

"Simple" or private loan agreement

The "simple" loan agreement must contain only the contracting parties, i.E. The lender and the borrower, and the loan amount. If no further agreements are made, the contract is still valid. If an interest rate is not expressly agreed, the statutory interest rate according to § 246 BGB currently 4% applies by implication. An interest-free loan is possible by explicit agreement.

A term does not necessarily have to be agreed. It may result from the time of repayment to be calculated by the installment amount. If neither term nor installments are agreed, the contract is valid for an indefinite period of time. In this case, the repayment of the amount is due three months after termination.

Consumer loan agreement

The consumer loan agreement must also contain further content (492 BGB) and information details (493 BGB).

These are in type. 247 § 6 EGBGB listed and include all contractual terms, in particular:

  • The name and address of the lender and borrower as well as the supervisory authority responsible for the lender,
  • The type of loan,
  • In addition to the total amount also the net loan amount plus. Of the annual percentage rate of charge,
  • The debit interest rate, plus. Conditions and period for its application, as well as the manner of its adjustment,
  • The term of the contract as well as the amount, number and due date of the individual partial payments, the reference to a right to a repayment plan and the borrower's right to repay the loan early,
  • The terms of disbursement plus. Of all other costs as well as the conditions under which the costs can be adjusted,
  • A warning about the consequences of non-payment, default interest rates and costs, as well as the manner in which any adjustments are to be made,
  • The existence or non-existence of a right of revocation,
  • The procedure to be followed when terminating the contract, if prescribed information is missing or is incorrect, this can lead to the invalidity of the contract, if no cure after. § 494 BGB is possible.

4. When is a loan agreement legally effective?

A loan agreement is valid if it has been agreed in accordance with the mandatory legal provisions and does not violate any legal provisions – such as usury (section 138 of the german civil code). In the case of the "simple" loan agreement, a verbal agreement is sufficient for this purpose. A written contract is not necessary for this. Only the declarations of intent made must be mutually received.

In the case of the consumer loan agreement, on the other hand, it does not take effect until there is a written contract with all of the minimum mandatory contents.

5. When does a loan agreement end?

A loan agreement ends with the expiry of the agreed contract period. This may also result from the agreed repayment provisions. If no contract period is agreed upon, the loan contract ends by a notice of cancellation.

6. Can a loan agreement be illegal?

Yes, a loan agreement can be unlawful. This is particularly the case with consumer loan agreements that do not meet the mandatory legal criteria.

However, illegality can also result from the lender taking advantage of a financial hardship of the borrower in order to enrich himself unreasonably through exaggerated repayment conditions.

In exceptional cases, a loan agreement can also be legally valid because a second borrower (bspw. A family member) is prescribed by the lender, who is in a dependent relationship with the actual borrower and does not himself have even the rudimentary financial means to meet the obligations under the loan agreement. This is bspw. If the person concerned cannot even pay the interest due on the basis of his income.

7. Can I terminate or cancel a loan agreement?

Yes, there is a right of cancellation. The law grants the borrower an ordinary right of termination vis-A-vis the lender in section 489 of the german civil code (BGB). In addition, both the lender and the borrower have an extraordinary right of termination.

In addition, in the case of a consumer loan agreement, there may be a right of revocation. In this case, the consumer can get out of the contract by revoking it.

In addition, it is possible to eliminate the loan agreement at any time by agreeing on a cancellation agreement by mutual consent.

9. Conclusion on the loan agreement

  • In the case of a loan agreement, the borrower receives a sum of money from the lender, which he must repay at the end of the agreement with interest.
  • A distinction must be made between "simple" loan agreements and consumer loan agreements.
  • A "simple" loan agreement can be concluded without any formalities. A consumer loan agreement must contain, in addition to the written form, other legally mandatory information under § § 492, 493 BGB.
  • A simple loan agreement is effective if it has been agreed between the contracting parties and does not violate any legal provisions. A consumer loan agreement is only valid if it complies with all legal requirements.
  • A loan agreement is terminated by the expiry of the agreed term of the agreement, by notice of termination or by a termination agreement. In the case of a consumer loan agreement, termination by revocation is also possible.

Lawyer for contract law and general civil law in erlangen

You have specific questions about the loan agreement or need a legally secure design? With our law firm you have a competent partner at your side.

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