Documents Required for a Personal Loan
K Satish Kumar LLB, CMA
Group Chief Legal Officer Also Conferred "Top General Counsel - 2022" - Forbes | "GC PowerList India - 2023" by London Based Legal 500 | "Legal Counsel of the Year -2018"by INBA|
The following documents are essential for a personal Loan account
1) Loan Agreement
2) Undertaking for Loan Agreement
3) Demand Promissory Note
4) DP Note Delivery cum Waiver Letter
5) Post-Dated Cheques
6) Post-dated Cheques covering Letter
Step 1: Loan Agreement - a binding Agreement between the lender and the borrower. This will be the mother Agreement based on which the loan is sanctioned.
Step 2: Undertaking for Loan Agreement is for taking a undertaking from the borrower that loan amount and the EMI can be will be repaid in monthly or other agreed frequency.
Step 3: Demand Promissory Note is part of any loan deal. This will be binding on the borrower and will be payable on demand.
Step 4: DP Note Delivery cum Waiver Letter: This document is required as a statuary waiver from the borrower for presentation of the Promissory note under section 98(a) of the Negotiable Instrument Act.
Step 5: PDC Covering Letter: This is handover of the letter saying the post dated cheques are willfully handed over and also an undertaking from the borrower that they will not change the signatory or if signatory is changed then the said cheques will be replaced with fresh set of cheques.