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A Credit Agreement is a legally binding contract between a lender and borrower that spells out the terms of a loan in Pakistan. It details the loan amount, interest rates, repayment schedule, and what happens if payments are missed. Banks and financial institutions use these agreements under the State Bank of Pakistan's prudential regulations.

The agreement protects both parties by clearly stating their rights and obligations. For borrowers, it outlines payment terms and any collateral requirements. For lenders, it provides legal recourse under Pakistani contract law if the borrower defaults. Most credit agreements in Pakistan must be registered and stamped according to local documentation requirements.

Use a Credit Agreement any time you're lending or borrowing money in Pakistan, especially for business loans, mortgages, or equipment financing. Banks require these agreements for all loans above Rs. 500,000, while microfinance institutions need them for loans exceeding Rs. 150,000 under SBP regulations.

The agreement becomes essential when structuring complex financing deals, offering variable interest rates, or including multiple payment schedules. Pakistani businesses often need these agreements when expanding operations, purchasing assets, or managing working capital. They're particularly important for secured loans where collateral is involved, as they protect both parties under the Financial Institutions (Recovery of Finances) Ordinance.

• Line Of Credit Agreement: Offers flexible, revolving credit with a preset limit, commonly used by businesses for ongoing operational expenses
• Money Lending Contract: Basic template for private lending transactions, following NBFC regulations for personal or small business loans
• Consumer Credit Agreement: Designed for retail lending like auto loans or personal financing, compliant with SBP consumer protection guidelines
• Credit Support Agreement: Used for securing credit through guarantees or collateral arrangements
• Senior Facilities Agreement: Complex agreement for large corporate loans with priority repayment status

• Banks and Financial Institutions: Primary lenders who draft and enforce Credit Agreements under SBP regulations, including both conventional and Islamic banks
• Corporate Borrowers: Companies seeking business loans, working capital, or project financing, often represented by their CFOs and legal teams
• Legal Counsel: Corporate lawyers and banking specialists who review, negotiate, and finalize agreement terms
• Individual Borrowers: Personal loan seekers who must comply with consumer protection rules under Pakistan's banking laws
• Guarantors: Third parties who provide additional security by guaranteeing loan repayment under the Contract Act
• Regulatory Bodies: SBP and SECP officials who oversee compliance and enforce lending regulations

• Borrower Details: Gather complete legal names, CNIC numbers, addresses, and business registration details if applicable
• Loan Specifics: Document the principal amount, interest rate, repayment schedule, and any grace periods
• Security Information: List all collateral details, including property documents or guarantor information
• Regulatory Compliance: Check current SBP guidelines for minimum documentation requirements and interest rate caps
• Documentation: Collect income proof, bank statements, and tax returns as per Pakistani banking requirements
• Agreement Generation: Use our platform to create a legally-sound Credit Agreement that includes all mandatory elements
• Verification: Review all terms and conditions match the approved loan parameters before finalizing

• Party Information: Complete legal names, addresses, and registration details of lender and borrower as per Contract Act 1872
• Loan Terms: Principal amount, interest rate, payment schedule, and maturity date following SBP guidelines
• Security Details: Collateral description, valuation, and enforcement rights under Transfer of Property Act
• Default Provisions: Clear consequences of default, acceleration clauses, and recovery procedures
• Representations: Borrower's warranties about financial condition and legal status
• Governing Law: Explicit mention of Pakistani law and jurisdiction for dispute resolution
• Execution Block: Properly formatted signature spaces with witness requirements and stamp duty details

A Credit Agreement differs significantly from an Intercreditor Agreement. While both deal with lending arrangements, they serve distinct purposes in Pakistani banking and finance law. Credit Agreements establish the primary lending relationship between a lender and borrower, while Intercreditor Agreements manage relationships between multiple lenders to the same borrower.

• Primary Focus: Credit Agreements outline loan terms, repayment schedules, and borrower obligations; Intercreditor Agreements establish priority and rights among multiple creditors
• Parties Involved: Credit Agreements are typically bilateral between lender and borrower; Intercreditor Agreements involve multiple lenders coordinating their rights
• Legal Timing: Credit Agreements are executed at loan origination; Intercreditor Agreements often come later when additional financing is needed
• Enforcement Scope: Credit Agreements deal with borrower defaults; Intercreditor Agreements handle conflicts between lenders' competing claims