Loan Bond with Sureties and Lower Interest Rate for Punctual Payment (India) by OLL
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Loan Bond with Sureties and Lower Rate of Interest in Case Punctuality in Payment
THIS DEED is executed on this day of at between:
1. Mr. X s/o Mr. Y r/o , hereinafter called the debtor on the first part.
2. Mr. A s/o B, r/o ., and Mr. DC s/o RA r/o ., hereinafter jointly called the sureties on the second part, and
3. Mr. C s/o D, r/o , hereinafter called the creditor on the third part.
Whereas the creditor has agreed to advance a loan of Rs.5,00,000.00 to the debtor, which is to be repayable in four years with interest at the rate of 18% per annum, provided two persons stand as surety of the debtor.
And whereas sureties above named are ready to stand as sureties of the debtor.
NOW THIS DEED WITNESSES AS UNDER:
1. That in pursuance of the said agreement the creditor has advanced a sum of Rs.5,00,000.00 (Rupees five lacs only), the receipt of which has been acknowledged by the debtor.
2. The debtor shall repay the loan in five years in half yearly installments of Rs.50,000/- with interest at the rate of 12% per annum.
3. That in case the debtor repays the installment of loan before at least 15 days of the due date, the interest shall be paid at the rate of 10% per annum.
4. That in case of failure on the part of the debtor or repay the loan and interest or its part thereof, the sureties shall be liable to repay such unpaid amount of loan and interest, for which sureties are agreed.
We the above noted parties have signed this deed on the date and place mentioned above, after fully understanding the contents of this deed in the presence of the following witnesses.
1. Name.......... Signature............... ..
Address.......... Debtor
2. Name.......... Signature
Address............. Surety
1.
2.
3. Name........... Signature.
Address........ Creditor
This template is a loan agreement where a creditor provides funds to a debtor, supported by two sureties who guarantee repayment. It features an incentive clause that reduces the interest rate if installments are paid at least 15 days before the due date.
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About this template
What is this template?
This is a formal deed of loan that creates a primary obligation for a debtor and a secondary obligation for two sureties. It is not a simple promissory note because it includes specific repayment schedules and a conditional interest rate discount. It uniquely contains a 15-day early payment window to trigger a lower interest rate of 10% instead of 12%.
When should you use it?
Use this document when a private loan requires formal guarantees from two individuals and the parties want to incentivise early repayment. Use a standard Loan Agreement if there are no sureties or if the interest rate is fixed regardless of payment timing.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Loan Amount and Acknowledgment | The Creditor advances Rs. 5,00,000.00 to the Debtor, who acknowledges receipt of the full amount. |
| 2 | Repayment Schedule and Standard Interest | The Debtor must repay the loan over five years via half-yearly installments of Rs. 50,000 at 12% interest per annum. |
| 3 | Punctual Payment Incentive | If the Debtor pays an installment 15 days before the due date, the interest rate reduces to 10% per annum. |
| 4 | Surety Liability | The Sureties are jointly liable to repay any unpaid loan or interest amount if the Debtor fails to meet obligations. |
Who it's for
- an individual in India borrowing money from a private creditor with third-party guarantors
- a lender requiring joint and several liability from two sureties for a personal loan
- a borrower seeking a 2% interest rate reduction for early installment payments
How long it runs and how it's signed
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