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Common Loan Agreement for Philippines

Common Loan Agreement Template for Philippines

A comprehensive legal document governed by Philippine law that establishes the terms and conditions of a loan between a lender and borrower. This agreement outlines crucial elements including the loan amount, interest rates (in compliance with BSP regulations), repayment terms, security arrangements, and default provisions. It incorporates requirements from the Civil Code of the Philippines and relevant banking regulations, ensuring proper documentation of the lending relationship while protecting both parties' interests through clearly defined rights, obligations, and remedies.

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Common Loan Agreement

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What is a Common Loan Agreement?

The Common Loan Agreement serves as the primary documentation for lending transactions in the Philippines, structured in compliance with the Civil Code of the Philippines and banking regulations issued by the Bangko Sentral ng Pilipinas (BSP). This document is essential for both commercial and personal lending, providing a comprehensive framework for the lending relationship. It typically includes detailed provisions on loan disbursement, interest calculation, repayment terms, events of default, and remedies. The agreement can be adapted for various lending scenarios, from simple bilateral loans to complex secured transactions, and may incorporate additional features such as guarantees or security arrangements. Understanding local regulatory requirements is crucial, particularly regarding interest rate calculations, mandatory disclosures under the Truth in Lending Act, and documentation requirements under Philippine banking laws.

What sections should be included in a Common Loan Agreement?

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

2. Background: Context of the loan agreement and brief description of the purpose

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

4. The Facility: Details of the loan amount, purpose, and availability period

5. Interest: Interest rate, calculation method, and payment periods in compliance with BSP regulations

6. Repayment: Repayment schedule, method, and prepayment provisions

7. Conditions Precedent: Conditions that must be satisfied before the loan is disbursed

8. Representations and Warranties: Borrower's statements about their legal and financial status

9. Covenants: Positive and negative obligations of the Borrower during the loan term

10. Events of Default: Circumstances that constitute default and corresponding remedies

11. Expenses and Indemnities: Allocation of costs and indemnification obligations

12. Notices: Communication procedures between parties

13. Assignment and Transfer: Rules regarding transfer of rights and obligations

14. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes

15. Execution: Signature blocks and execution formalities

What sections are optional to include in a Common Loan Agreement?

1. Security: Required if the loan is secured, detailing the collateral and security arrangements

2. Guarantees: Include when there are third-party guarantors for the loan

3. Insurance: Required when specific insurance coverage is mandatory for the loan

4. Agent Provisions: Include for syndicated loans with multiple lenders requiring an agent

5. Tax Provisions: Detailed tax provisions when cross-border elements or complex tax implications exist

6. Currency Provisions: Required when the loan involves foreign currency or multiple currencies

7. Change of Control: Include for corporate borrowers where ownership changes may affect the loan

8. Electronic Execution: Include when parties agree to electronic signing under the E-Commerce Act

What schedules should be included in a Common Loan Agreement?

1. Schedule 1 - Loan Details: Detailed breakdown of the loan amount, interest rate, and payment schedule

2. Schedule 2 - Conditions Precedent Documents: List of required documents and conditions to be satisfied

3. Schedule 3 - Repayment Schedule: Detailed amortization table with payment dates and amounts

4. Schedule 4 - Form of Drawdown Notice: Template for requesting loan disbursements

5. Schedule 5 - Security Details: Description of security or collateral (if applicable)

6. Schedule 6 - Permitted Security Interests: List of existing or permitted security interests

7. Schedule 7 - Form of Compliance Certificate: Template for periodic compliance reporting

8. Appendix A - Calculation of Interest: Detailed methodology for interest calculation

9. Appendix B - Required Insurance: Specifications for required insurance coverage (if applicable)

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

Philippines

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions










Clauses






























Relevant Industries

Banking

Financial Services

Real Estate

Construction

Manufacturing

Retail

Agriculture

Technology

Healthcare

Education

Transportation

Energy

Mining

Telecommunications

Small and Medium Enterprises

Relevant Teams

Legal

Finance

Compliance

Risk Management

Treasury

Credit

Corporate Banking

Retail Banking

Documentation

Operations

Account Management

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Compliance Officer

Credit Risk Manager

Loan Officer

Corporate Secretary

Treasury Manager

Financial Controller

Banking Relationship Manager

Credit Analyst

Legal Associate

Finance Manager

Account Manager

Risk Officer

Documentation Specialist

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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