These terms have their own purpose in the credit agreement and it is therefore important to understand the meaning of these terms in the design or use of a credit agreement. Guarantees are the assets of the borrower with whom he secures a loan from you. The credit agreement must mention the object used as collateral, which usually includes real estate, vehicles or jewellery. In short, a credit agreement is a formal legally binding document that constitutes both positive and negative agreements between the borrower and the lender, in order to protect both parties if one of the parties does not respect its commitments. Getting a private loan with bad credit is usually very difficult. A lender can use a legal credit agreement to enforce the repayment if the borrower does not maintain the end of the agreement. Interest calculated on a loan is regulated by the home state and is governed by the state`s laws on usury rates. The rate of usury of each state varies, so it is important to know the interest rate before calculating an interest rate to the borrower. In this example, our loan comes from New York State, which has a maximum wear rate of 16% that we will use. Once the agreement is approved, the lender should pay the funds to the borrower….