Rehabilitation Loan Agreement

A rehabilitation loan agreement is one that is entered into between two parties namely the lender and a borrower. The agreement comes into existence in the event of a default of loan by the borrower and this agreement is entered into for rehabilitation of the defaulted loan. The loan that has been defaulted gets revamped by the borrower where in new interest rate is applicable along with new terms and conditions for the rehabilitated loan. A rehabilitation loan agreement helps to improve the credit rating and score of the borrower by considering the defaulted loan on new terms.

Sample Rehabilitation loan agreement

This agreement is entered into between Mr. Arnold S Z and Nova Bank of London who are the borrower and the lender of the loan respectively on this 15th day of March 2013.

The rehabilitation loan agreement sets out the various terms and conditions agreed upon by the borrower as specified here below:-

Terms and conditions:-

  1. The lender agrees to provide a loan of 10,000 pounds to the borrower as against the mortgage of property and have a first lien on the property in the event of liquidation through sale.

  2. The borrower has to make monthly payments towards the loan amount as specified by the bank before the 5th of every month without fail.

  3. The lender agrees to place an amount of 2000 pounds from the loan provided towards rehabilitation of the existing loan and disburse the remaining amount to the borrower after deducting professing and administrative fees as applicable.

  4. The lender shall charge an interest of 8% per annum which is proportionately included in the equated monthly installment of 400 pounds per month to be repaid by the borrower.

  5. The borrower agrees to repay the loan amount without fail and promises not to default another time failing which the lender has the right to claim legal remedies for the same.


Signature of lender ________________________

Signature of borrower ________________________

Category: Loan Agreements

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