If you are looking to buy a car or lend money to someone so that they can buy a car, we have a car loan contract which you will find useful. Buying a car on leasing or finance arrangement is often an attractive option because there can be tax benefits for this which can really help you to afford a vehicle purchase that can assist you with greater mobility, give you greater freedom and expand your life.
There some fundamental elements to a loan agreement which can be used to ensure that the relationship between a creditor and debtor in a car loan contract is sound legally and enforceable. This is particularly useful to know where you are the person lending money for repayments on a car. A loan agreement is most usually in writing as it is much more difficult to make the agreement stand up before a judicial officer if the agreement is not put down in ink. Usually the classification of car loan contracts is either by the kind of entity loaning the money or according to the nature of the finance product that is being offered.
Essential Elements of a Car Loan Contract:
You need to understand that there are some things that a loan contract will need to have to be valid. It should say who the people entering into the agreement are. It should state what the principle figure of the loan is and what the rate of interest is. Some loans are interest only loans, others involve a repayment of the principle amount. The loan contract would also usually need to say the amount of time that the loan is for and the purpose for which the money is being lent which, in the case of a car loan is obviously for the purchase of a car. Sometimes it is a practice by lenders to include a clause which has a negative consequence for the early repayment of the debt. You usually need to get have the contract witnessed by a notary public as well and then make sure that a copy is given to the person that is receiving the funds. It needs to be signed by everyone that is a party to the contract.
Obviously, it is usually wise to use a sample document like the one that we have available for download here if you are planning to draft a document like this without the assistance of an attorney, but we would always recommend that you get an attorney to help you with this.