Loan Agreement

A loan agreement, or a lending agreement, is a formal contract between a lender and a borrower, which regulates the mutual obligations of each party. An agreement usually spells out all the loan details, such as the principal amount, interest rate, term, fees, payment terms, or the lender’s rights to collect payment in case of a default. On most P2P lending sites, you automatically enter a loan agreement every time you invest in a loan.