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Loan Note Template for Philippines

A comprehensive financial instrument governed by Philippine law that documents and formalizes a loan agreement between a lender and borrower. The document details the essential terms of the loan including principal amount, interest rate, repayment schedule, and security arrangements if applicable. It ensures compliance with Philippine banking regulations, particularly the Truth in Lending Act and Central Bank requirements, while providing clear enforcement mechanisms under the Civil Code of the Philippines. The document includes necessary representations, warranties, and covenants to protect both parties' interests and establish a legally binding obligation.

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What is a Loan Note?

The Loan Note is a fundamental financial document used in the Philippines to formalize lending arrangements between parties. It serves as both a proof of debt and a binding agreement that outlines the terms and conditions of the loan. This document is essential when extending credit, whether in a commercial, corporate, or personal context, and must comply with Philippine banking regulations and civil law requirements. The Loan Note typically includes detailed provisions on the loan amount, interest calculations, payment terms, events of default, and enforcement mechanisms. It's particularly important for ensuring transparency in lending transactions as required by the Truth in Lending Act and other Philippine banking regulations. The document can be used for various types of loans, from simple personal loans to complex commercial financing arrangements, and may include additional security or guarantee provisions as needed.

What sections should be included in a Loan Note?

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

2. Background: Brief context of the loan arrangement and relationship between parties

3. Definitions: Key terms used throughout the note, including financial terms and calculation methods

4. Principal Amount: Statement of the loan amount in both figures and words

5. Interest Rate: Clear specification of interest rate, calculation method, and payment frequency

6. Term and Repayment: Duration of the loan and detailed repayment schedule

7. Payment Terms: Methods of payment, account details, and payment processing procedures

8. Events of Default: Circumstances constituting default and consequences

9. Representations and Warranties: Standard declarations by the borrower about their legal capacity and financial condition

10. Covenants: Ongoing obligations of the borrower during the loan term

11. Governing Law: Specification of Philippine law as governing law

12. Execution: Signature blocks and execution requirements

What sections are optional to include in a Loan Note?

1. Security: Include when the loan is secured by specific assets or collateral

2. Guarantees: Include when there is a third-party guarantor for the loan

3. Prepayment Terms: Include if early repayment is allowed, specifying any penalties or conditions

4. Insurance Requirements: Include when specific insurance coverage is required for secured assets

5. Assignment and Transfer: Include if the note can be transferred or assigned to other parties

6. Tax Provisions: Include when specific tax considerations need to be addressed

7. Multiple Borrowers: Include when there are multiple borrowers to specify joint and several liability

8. Electronic Execution: Include if the note may be executed electronically under the E-Commerce Act

What schedules should be included in a Loan Note?

1. Repayment Schedule: Detailed amortization table showing principal and interest payments

2. Security Details: Description and documentation of any collateral or security

3. Calculation of Interest: Detailed methodology for interest calculations and examples

4. Form of Notice: Template for various notices required under the note

5. Fees and Charges: Comprehensive list of all applicable fees and charges

6. Required Documents: List of supporting documents to be provided by the borrower

7. Conditions Precedent: List of conditions to be met before loan disbursement

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

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions



































Clauses






























Relevant Industries

Banking

Financial Services

Real Estate

Manufacturing

Agriculture

Retail

Construction

Technology

Energy

Transportation

Small and Medium Enterprises

Commercial Lending

Microfinance

Relevant Teams

Legal

Finance

Credit

Risk Management

Compliance

Treasury

Corporate Banking

Retail Banking

Documentation

Operations

Underwriting

Account Management

Relevant Roles

Credit Officer

Loan Officer

Legal Counsel

Corporate Lawyer

Financial Controller

Chief Financial Officer

Risk Manager

Compliance Officer

Banking Manager

Credit Analyst

Finance Director

Treasury Manager

Account Manager

Relationship Manager

Documentation Specialist

Underwriter

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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