If the borrower and the guarantor do not repay the loan, the borrower can take legal action against both the borrower and the guarantor to recover the credit. Although the lender has the right to sue both the borrower and the guarantor, the repayable amount is still only the outstanding amount of the loan. The lender cannot recover twice, as the result is what is called a “double recovery” and the lender is unduly enriched. Overall, it is essential to identify some of the key factors to consider as well as the essential conditions before obtaining a housing construction loan. Be sure to do the math and weigh the pros and cons before you commit. How can I make sure my credit is not granted “as a business”? A simple and relatively simple way is for the borrower to bring a third party who guarantees the amount borrowed. In the event that the borrower is in arrears in payment, the lender can use the guarantee to recover the remaining amount of the loan. The guarantor can be a company or an individual. The lender will want to ensure that the person or company giving the guarantee is financially stable to ensure a viable chance of recovering the loan. The first implication is that the Friendly Loan Agreement is legally considered inconclusive. This does not mean, however, that the borrower does not have to repay the amount borrowed. The loan must be repaid in accordance with section 66 of the 1950 contract, which provides that “if an agreement is found to be void or if a contract becomes void, any person who has benefited from the agreement or contract is obliged to reinstate or compensate for it.
to the person from whom he received it” (see also the case of Muhibbah Teguh Sdn Bhd v Yaacob Mat Yim  4 CLJ 853). Step 2 – Prepare a sharing document. The aim is to create a guarantee on the shares that can be exercised in the event of a breach of the loan agreement. In addition to the need to repay the loan, other terms of the loan agreement (such as eligible interest and the application of securities) become null and void and unenforceable as soon as the contract is considered void by law. After signing the letter of offer, the bank will order its board of directors to continue the preparation of the credit documents. This includes the lawyer`s fee to be paid to the lawyer and a stamp duty applicable to the main security document, z.B. facility agreement. The stamp duty rate set by the Stamp Act 1949 is approximately 0.5% of the loan amount. This can easily go up to thousands. Some banks may offer packages with “zero moving costs” or “free moving expenses”. It simply means that the bank covers some of the costs, such as attorneys` fees and payments collected by the lawyer. This may sound promising, but remember that some banks may offer a higher interest rate than the usual interest rate for this type of packages.
You can also choose to fund your attorney`s fees, that is: include attorneys` fees in the amount of your loan and pay it accordingly in increments. Land (i.e. real estate) is a good method to insure the amount borrowed. There are five steps to achieve this: the court will take into account factors such as: how many times the lender has lent money; whether the interest calculated on the loan is high; and what is the relationship between the parties? Friendly credit agreements are valid and can be a useful mechanism for the public to support each other in times of distress….