Private Investor Loan 3 Years 7.2% annum

3 Replies

We are looking into getting a private Investors Loan of 120,000$ with these Terms. We are calculating our repayments to be around 2700$ Would this be correct? Also we are not quite sure what point 3b means for us.... 

"The term of the loan is five (3) years and therefore ends on the twenty-eighth of June two thousand and twenty-four.
2. Interest and fixed-rate period
a. The Debtor owes the Creditor an interest of seven and two-tenths percent (7.2%) per annum on the Principal Amount or the remainder thereof, payable monthly in advance, for the first time on @ over the period since then .

b. The interest rate will be fixed during the term of the loan.
c. The Debtor owes the Creditor a closing commission of two percent (2%) of the principal sum, which will be deducted from the amount to be paid by the creditor to the debtor.
3. Repayment
a. During the first year of the term of the loan, the Debtor is not authorized to repay the principal or the remainder thereof.
b. During the remainder of the term of the loan, the
Debtor has the right to up to twenty percent (20%) of the
(original) principal sum per calendar year without any (extra) early repayment "

Thanks in advance

Hi @Tom S. The year Term is my bad, I modied the time range on the number and not the wording. That is an example of the contract that would be asked from us. We are mostly concerned about the short Term, point 3B, and I have more of the contract which I will post here underneath:

Claimability
The amount owed (with accrued interest on the entire principal during the entire term, three months extra interest and the costs) will be immediately due and without notice, notice of default, written warning or other formality due in the following cases:
a. if the debtor may be negligent in complying with one or more provisions made by this deed;
b. if the debtor has been granted suspension of payment or the debtor has been declared bankrupt, the debtor's property has been wholly or partially seized by third parties and if the debtor otherwise loses the free disposal of his assets;
c. upon seizure of the collateral;
d. upon alienation (whether or not only economically) or expropriation of the collateral in whole or in part;
e. in the event of fire damage or any other depreciation or potential depreciation of the collateral, whether or not due to the application of any government measure to the collateral; f. if another debt for which the collateral may be linked to a mortgage becomes due and payable;
g. when (one of) the debtor (s) dies. In the event of such termination, all that is owed by the Debtor is due immediately and without notice of default.
MORTGAGE STATION
In implementation of the foregoing, the Debtor grants the Creditor, who assumes this, a right of mortgage or - as far as necessary now for then - a right of pledge on the Collateral to be described below, as additional security for:
the repayment of the Principal Amount of eighty thousand euros (€ 80,000.00);
b. to be increased with interest and any increase to be agreed later and all that the Creditor has or will have to claim in connection with the above for fines, costs and rights, damages or otherwise estimated together at thirty-five percent
(35%) of the Principal, namely twenty-eight thousand euros
(€ 28,000.00), therefore for a total amount of one hundred eight thousand euros (€ 108,000.00).
PROVISIONS MORTGAGE ESTABLISHMENT
The following provisions and stipulations apply to this mortgage lending, the latter being made explicit.
1. Evidence
Mortgagor and Hypotheekhouder stated that the administration of Mortgageholder serves as

complete proof of the debt owed by Mortgagor to Mortgageholder, unless proof to the contrary is provided.
2. Maintenance, insurance, damage
The Collateral must be properly maintained by the Mortgagor and the associated buildings must be insured at its expense with a solid company against reconstruction value and kept insured against all damage as a result of fire, lightning and explosion and furthermore against all other damage that Mortgage Holder would wish. At his request, the policies and premium receipts must be handed to him.
In the event of damage, the Mortgage Holder must be notified as soon as possible. The regulation of compensation requires the prior approval of the Mortgage Holder. The legal right of pledge on compensation, as well as on other compensation referred to in Section 3: 229 of the Dutch Civil Code, can be communicated to the Debtor concerned at any time.
3. Payment of charges and premiums
The owner's charges, any fees, canons and other charges on the Collateral, as well as insurance premiums must be paid on time. If this does not happen, the Mortgage Holder is authorized to do this himself and to reclaim the amount paid and to consider it as costs referred to in Chapter E., under b. of this deed.
4. Prohibitions
The Collateral may, without the express written permission of Mortgage Holder:
- are not changed in nature or destination, design or shape, unless under the authorization as referred to in Section 3: 265 of the Dutch Civil Code;
- are not encumbered with further mortgages, easements or any other limited right or a qualitative obligation, unless
with permission from Mortgage Holder;
- are not rented or leased and in any case the advance payment of rent and lease payments and of other compensations is prohibited, as well as the alienation and pledging of rent and lease payments and other rights arising from the lease or lease agreement, or the right to them;
- not in use or enjoyment under any other title.
5. Pledges
The changes and / or additions made to the Collateral - including those that would fall under the prohibition referred to in paragraph 5 - may never be removed. Even if they are taken away, they are already pledged to the Mortgage Holder, who then accepts this pledge.
The mortgage lender stated that he pledged to the Creditor in execution of the aforementioned agreement, to the same security as for which the mortgage was granted:
a. all movable property that according to the opinion of traffic is or will be intended to serve the Collateral in a sustainable manner and that can be recognized as such by their form;
b. all movable property that is separated from the Collateral;
c. all rights and actions arising from rental or lease agreements that relate to the Collateral, in particular rights to the rent or lease payments and to compensation, regardless of which, with regard to the use of the Collateral;
d. all rights and actions that Debtor against those who have it
Have collateral without real or title in use can assert.
The creditor is authorized to execute the aforementioned movable property and the Collateral together in accordance with the mortgage rules.
Mortgage lender stated:
be authorized to pledge the above;
b. that the pledged goods were not subject to limited rights

Thanks in advance