A credit agreement is a legal contract between a lender and a borrower that outlines the terms of a loan. It specifies the amount borrowed, the interest rate, repayment schedule, and any fees associated with the loan. This document serves to protect both parties by clearly defining their rights and responsibilities.
These agreements can vary widely depending on the type of credit, such as personal loans, mortgages, or credit cards. Understanding the terms of a credit agreement is essential for borrowers to manage their finances effectively and avoid potential pitfalls like defaulting on the loan.
