What Is a Loan Extension Agreement?
A loan extension agreement allows borrowers additional time for their loans to mature. This agreement amends the original loan agreement by restructuring the borrower’s payment schedule, including setting a new maturity date in place of the original loan. In addition, a loan extension agreement may include additional terms and conditions in the loan agreement to guarantee repayment of the loan by the borrower.
How To Create a Loan Extension Agreement?
Loan extensions exist in all types of loans, such as family loans and promissory notes, to name a few. And, these are often given to borrowers who find and consider the lenders trustworthy or to someone who has no record of a crime. Loan extensions should normally be documented in an agreement with any loan. And to do so, here are the steps to create a loan extension agreement.
- Identify The Parties of The Loan
- Set The Date the Original Loan Agreement was signed
- Set The Amount Borrowed (Original Amount)
- Set The Original Maturity Date
- Set The new Maturity date or when the money must be paid back by.
- Include Additional Terms and Conditions if Necessary
- Execution Date of this Extension Agreement
- Sign the Agreement, Notarize if Needed
Extend Many Types of Loans
Loan extension agreements are documents that extend the maturity period of a loan agreement. These are often used in different types of loans, such as the following:
- auto loans;
- business loans;
- construction loans;
- mortgages;
- payday loans;
- personal loans;
- family loans; and
- school loans.