Document background
The Loan Letter is a fundamental financial document used in Danish lending transactions to formalize the terms of a loan between parties. It is particularly useful for both commercial and personal lending scenarios where a full loan agreement might be unnecessarily complex. The document must comply with Danish financial regulations, including the Danish Contracts Act, Interest Act, and Credit Agreements Act. A Loan Letter typically includes essential terms such as loan amount, interest rates, repayment terms, and any security arrangements, while being more concise than a full loan agreement. It's commonly used for straightforward lending arrangements, intra-group loans, or as a preliminary commitment document before a more detailed agreement is executed. The document must be drafted to ensure enforceability under Danish law while maintaining clarity and precision in its terms.
