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Non Interest Bearing Loan Agreement for Indonesia

Non Interest Bearing Loan Agreement Template for Indonesia

This document is a comprehensive Non-Interest Bearing Loan Agreement governed by Indonesian law, designed to facilitate interest-free lending transactions between parties. It incorporates key provisions required under Indonesian civil law and banking regulations, while potentially accommodating Islamic finance principles. The agreement covers essential elements including loan amount, repayment terms, borrower obligations, and default provisions, all structured within the Indonesian legal framework. It can be used for both personal and business lending, with flexibility to add security and guarantee provisions as needed.

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Non Interest Bearing Loan Agreement

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What is a Non Interest Bearing Loan Agreement?

The Non Interest Bearing Loan Agreement is a specialized financial instrument used in Indonesia for situations where parties wish to engage in lending without the application of interest, whether for religious, social, or business reasons. This document type is particularly relevant in Islamic finance contexts, family lending, and social impact lending. It must comply with Indonesian Civil Code requirements and potentially with Islamic finance principles under Law No. 21 of 2008. The agreement typically includes provisions for loan amount, repayment terms, borrower obligations, and default scenarios, while explicitly excluding any interest charges. It can be adapted for various lending situations, from simple personal loans to complex corporate arrangements, and may include optional security or guarantee provisions based on the parties' requirements.

What sections should be included in a Non Interest Bearing Loan Agreement?

1. Parties: Identification of the Lender and Borrower with complete legal names and addresses

2. Background: Context of the loan arrangement and confirmation of interest-free nature

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of the principal amount and intended use of the loan

5. Confirmation of Interest-Free Nature: Express statement that the loan is interest-free and compliant with applicable laws

6. Disbursement: Terms and conditions for disbursement of the loan

7. Repayment Terms: Schedule and method of repayment of the principal amount

8. Representations and Warranties: Standard representations by both parties regarding their capacity and authority

9. Borrower's Covenants: Ongoing obligations of the borrower during the loan term

10. Events of Default: Circumstances constituting default and consequences

11. Remedies: Lender's rights and remedies upon default

12. Notices: Process for formal communications between parties

13. Governing Law: Confirmation of Indonesian law as governing law

14. Dispute Resolution: Mechanism for resolving disputes between parties

What sections are optional to include in a Non Interest Bearing Loan Agreement?

1. Security: Required if the loan is to be secured by any assets or collateral

2. Guarantor Provisions: Required if a third party is guaranteeing the loan

3. Early Repayment: Include if early repayment is permitted and any associated conditions

4. Currency Provisions: Required if the loan is in foreign currency or involves cross-border elements

5. Assignment: Include if either party may assign their rights under the agreement

6. Force Majeure: Include for longer-term loans to address unforeseen circumstances

7. Electronic Execution: Include if the agreement may be executed electronically

8. Shariah Compliance: Include if parties wish to explicitly confirm compliance with Islamic finance principles

What schedules should be included in a Non Interest Bearing Loan Agreement?

1. Repayment Schedule: Detailed schedule of repayment dates and amounts

2. Disbursement Conditions: List of conditions precedent to loan disbursement

3. Form of Disbursement Request: Standard form for requesting loan disbursement

4. Details of Security: Description of any security or collateral (if applicable)

5. Specimen Signatures: Authorized signatures of parties and signing instructions

6. Bank Account Details: Account details for disbursement and repayment

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions





































Clauses






























Relevant Industries

Banking and Financial Services

Islamic Finance

Real Estate

Small and Medium Enterprises

Non-Profit Organizations

Education

Healthcare

Agriculture

Family Business

Social Enterprise

Religious Organizations

Microfinance

Relevant Teams

Legal

Finance

Compliance

Risk Management

Treasury

Credit Administration

Islamic Banking

Corporate Secretarial

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Manager

Legal Counsel

Compliance Officer

Shariah Compliance Officer

Credit Manager

Risk Manager

Corporate Secretary

Treasury Manager

Financial Controller

Loan Officer

Business Development Manager

Islamic Finance Specialist

Contract Administrator

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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