The Simple Interest Loan Agreement is a fundamental financial instrument used in Indonesian business and personal transactions where one party (the lender) agrees to provide financial assistance to another party (the borrower) with interest calculated only on the principal amount. This document is essential when establishing clear, legally enforceable lending terms in compliance with Indonesian banking regulations, particularly Law No. 7 of 1992 on Banking (as amended) and OJK regulations. It's commonly used for both corporate and individual lending, providing a straightforward framework for calculating interest and managing repayment obligations. The agreement is particularly suitable for short to medium-term loans where parties prefer transparency in interest calculations and want to avoid compound interest arrangements. It must incorporate specific requirements under Indonesian law, including mandatory provisions for financial agreements and consumer protection measures.
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1. Parties: Identifies and provides full details of the Lender and Borrower, including their legal names, addresses, and any registration numbers
2. Background: Explains the context of the loan agreement and the parties' intention to enter into the lending arrangement
3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty
4. Loan Amount and Purpose: Specifies the principal amount of the loan and its intended use
5. Interest Rate and Calculation: Details the simple interest rate, calculation method, and frequency of interest accrual
6. Repayment Terms: Specifies the repayment schedule, payment amounts, and payment methods
7. Representations and Warranties: States the fundamental promises and assertions made by the Borrower regarding their capacity and ability to repay
8. Events of Default: Lists circumstances that constitute default and the consequences thereof
9. Remedies: Outlines the Lender's rights and remedies in case of default
10. Governing Law and Jurisdiction: Confirms Indonesian law as governing law and specifies jurisdiction for dispute resolution
1. Security: Include when the loan is secured by collateral or guarantees
2. Insurance: Include when insurance is required for the loan or any associated collateral
3. Prepayment Terms: Include when early repayment is allowed, specifying any penalties or conditions
4. Assignment and Transfer: Include when either party may need to transfer their rights or obligations
5. Force Majeure: Include for longer-term loans to address unforeseeable circumstances
6. Tax Provisions: Include when specific tax considerations need to be addressed
7. Guarantor Provisions: Include when a third-party guarantor is involved in the loan
1. Schedule 1 - Repayment Schedule: Detailed amortization table showing payment dates, interest, and principal amounts
2. Schedule 2 - Collateral Details: Description and documentation of any security or collateral (if applicable)
3. Schedule 3 - Conditions Precedent: List of documents and conditions that must be satisfied before loan disbursement
4. Appendix A - Notice Details: Contact information and approved methods for formal notices between parties
5. Appendix B - Form of Drawdown Notice: Standard form for requesting loan disbursement (if multiple disbursements)
6. Appendix C - Form of Compliance Certificate: Template for periodic confirmation of compliance with loan terms
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
Real Estate
Manufacturing
Agriculture
Retail
Technology
Construction
Small and Medium Enterprises
Education
Healthcare
Hospitality
Mining and Resources
Transportation and Logistics
Relevant Teams
Legal
Finance
Treasury
Compliance
Risk Management
Credit Administration
Corporate Secretariat
Business Development
Operations
Internal Audit
Relevant Roles
Chief Financial Officer
Finance Director
Treasury Manager
Financial Controller
Legal Counsel
Compliance Officer
Risk Manager
Credit Manager
Loan Officer
Corporate Secretary
Business Development Manager
Account Manager
Financial Analyst
Legal Manager
Banking Relationship Manager
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