Loan Termination Agreement

A termination loan agreement is a document that is drafted when a party referred to as the lender terminates the loan agreement that he has entered with the borrower. The termination can take place due to various reasons like pre payment of the loan, in ability to pay the loan and others. The details mentioned in the agreement include the reason for terminating the loan, the principal amount of loan, the outstanding loan amount. There are various other terms and conditions mentioned in the agreement that both the parties need to agree to.

Sample Loan Termination Agreement

This loan termination agreement is entered on 10th of March 2012 between All Purpose Financial Services Limited referred to as the lender and Oscar Production Limited referred to as the borrower.

The lender had entered onto a loan agreement with the borrower on 7th of June 2011 for a principal loan amount of one million dollars.

As per the current agreement the lender agrees to terminate the loan agreement as the borrower is prepaying the loan amount in full.

The terms and conditions of the agreement are as follows:

  1. The borrower guarantees to prepay the complete loan amount due that is $800000.
  2. The borrower agrees to pay the termination amount that is one percent of the due loan amount.
  3. The interest amount will also be charged which will be equivalent to the total interest amount till the term end date of the loan agreement.
  4.  The closing date of paying the due amount along with the termination amount is 25th of March 2012. In case the borrower is unable to pay the loan amount by that date, he will be charged a late payment fee.

Signature of the borrower: ______________

Jim Bean

(On behalf of Oscar Production Limited)

Signature of the lender: __________

Lenny Bin

(On behalf of All Purpose Financial Services Limited)

Category: Loan Agreements

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