Payment arrangement agreement letter is document which contains contract of loan repayment. It provides the terms agreed by promisor and payee. No matter which side you are in the moneylending event, you’ll be benefitted by having everything laid out and documented clearly to give you good assurance.
How Do I Write A Letter of Agreement?
Here’s how you should formatted letter of agreement in general:
- Signify all the parties that involved within the agreement.
- Mention the reason of writing the agreement.
- Use straightforward and easy to understand wordings.
- List out the expected duties of the involved parties, including if there’s third parties.
- Define all terms and conditions that applied in the agreement.
- Sign the letter for each party involved.
How Do You Draft A Payment Agreement?
Below are the components that must be included in the agreement letter for payment:
- The name of debtor and creditor
- The amount of owed money
- The amount of owed balance
- Interest rate if there’s any
- Repayment instructions and period
- Terms of upon late payment if there’s any
- Signatures of the parties
How Do You Write A Payment Schedule for A Letter?
Writing a detailed payment arrangement agreement letter is necessary, because it lowers the risk of raising disputes. Low risk of dispute means lower chance of raising litigation. If ever litigation happened then the agreement must be brought to the front of court table.
How Does A Payment Plan Work?
Payment plan is more common for commercial transaction, where there’s a specific amount money that should be paid back monthly by customers until their balance is clear. It is typically a part of installment schedule arranged by retailer.
Sample of Letter to Arrange Payment Agreement
Here is a customizable example of the agreement letter for payment:
(Full name of debtor)
(Full name of creditor)
(Date of loan)
(Loan total amount)
(Final repayment date)
This letter serves as acknowledgement that I, (payee’s name), borrowed $5,000 from (promisor’s name) on December 3, 2020. We both agree of repayment arrangement according to the payment schedule as stated below.
Payee agrees to make repayment by using personal check to Promisor, for $1000 during the first week of the next 5 months, starting from the first week of January 2021. Thus, the last payment to make the loan fully repaid will be on May 2021.
Both parties agree that payee has to pay additional $70/week if they ever made late payment from the first week of the month. The delayed payment charge of $70 may be allotted to $10 charge each day if the late period is less than seven days.
Both parties agree to all the terms and conditions that defined as above and will take responsibility as such.
(Payee’s signature and date)
(Promisor’s signature and date)
(Third party’s signature and date)
The payment arrangement agreement letter above is simple enough that you shouldn’t have any difficulty to use it as reference. Simply edit it to match with your payment clauses, terms, and conditions that have been agreed upon.