Automobile Loan Contract

By | February 24, 2015

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This contract is between a borrower and a lender of a loan. The loan in question is given to the borrower to buy an automobile.

Loan applied for :……………………………. (the model and the make of the automobile).

Loan applied by : ………………………………. (Name of the person and his profession).

Address of the borrower: …………………………………..

Contact Number of the borrower:………………………………..

Loan sanctioned by : ……………………………….(name of the bank).

Nature of the loan:  The loan has been provided by the …………..bank to the individual on the grounds that the entire loan amount of $ ……. will be required for the purchase of a certain car (other specifications given in the enclosed document). The loan has been subject to the following terms and conditions.

  • The loan has been sanctioned for a time period of …………. years before completion of which the entire loan amount of $ ………………… has to be repaid at the bank.
  • The date for clearance of the first instalment will be ……………
  • The last date for the clearance of the final instalment will be ………..
  • A guarantor has been appointed for the loan, ………………… (name of the guarantor) who would be responsible for the loan repayment in the absence of the borrower or in case of failure to pay the amount.
  • The rate of interest will be ……. % per annum.
  • The terms and conditions of the loan will be binding on both the parties and will have to be strictly followed. Any violation or breach of the clauses of the deal will be a punishable offence.

 Prepayment: Borrower has the right to pay back the whole exceptional amount at any time. If Borrower pays before time, or if this loan is refinanced or replaced by a new note, Lender will refund the unearned finance charge, figured by the Rule of 78-a commonly used formula for figuring rebates on instalment loans.

Default: If for any reason Borrower not succeeds to make any payment on time, Borrower shall be in default. The Lender can then order instant payment of the entire remaining unpaid balance of this loan, without giving anyone further notices. If Borrower has not paid the full amount of the loan when the final payment is due, the Lender will charge Borrower interest on the unpaid balance at ______ percent (%) per year.