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Simple Interest Loan Contract for Nigeria

Simple Interest Loan Contract Template for Nigeria

A Simple Interest Loan Contract governed by Nigerian law is a legally binding agreement that establishes the terms and conditions for a loan where interest is calculated solely on the principal amount. This document outlines the loan amount, interest rate, repayment schedule, and obligations of both parties while ensuring compliance with Nigerian banking regulations, money lending laws, and contract formation requirements. It includes provisions for default, remedies, and security arrangements, structured to be enforceable under Nigerian jurisdiction and aligned with local financial practices.

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What is a Simple Interest Loan Contract?

The Simple Interest Loan Contract is essential for documenting lending arrangements in Nigeria where interest is calculated only on the original principal amount. This document is commonly used for both personal and business loans, particularly in situations where transparency and straightforward interest calculations are preferred. It complies with Nigerian financial regulations, including the Money Lenders Act and Central Bank of Nigeria guidelines, making it suitable for various lending scenarios from individual lenders to financial institutions. The contract includes all necessary provisions required by Nigerian law for loan agreements, such as clear interest rate statements, repayment terms, and security arrangements if applicable. It's designed to protect both lender and borrower interests while ensuring enforceability in Nigerian courts.

What sections should be included in a Simple Interest Loan Contract?

1. Parties: Identifies and provides full details of the Lender and Borrower, including addresses and registration details if applicable

2. Background: Brief context of the loan arrangement and purpose

3. Definitions: Defines key terms used throughout the agreement

4. Loan Amount and Purpose: Specifies the principal amount being lent and its intended use

5. Interest Rate: Details of the simple interest rate and calculation method

6. Repayment Terms: Specifies payment schedule, installment amounts, and payment methods

7. Representations and Warranties: Statements of fact and assurances given by the Borrower

8. Events of Default: Circumstances that constitute default and their consequences

9. Remedies: Lender's rights and remedies in case of default

10. Notices: How formal communications between parties should be made

11. Governing Law: Confirms Nigerian law as governing law and jurisdiction

12. Execution: Signature blocks and execution requirements

What sections are optional to include in a Simple Interest Loan Contract?

1. Security: Include when the loan is secured by specific assets or guarantees

2. Insurance: Include when insurance is required for secured assets or the borrower's life

3. Prepayment Terms: Include when early repayment is allowed, specifying any penalties or conditions

4. Assignment: Include when either party may need to transfer their rights or obligations

5. Force Majeure: Include for longer-term loans to address unforeseen circumstances

6. Guarantor Provisions: Include when a guarantor is involved in the loan agreement

7. Costs and Expenses: Include when there are specific provisions about who bears various costs

What schedules should be included in a Simple Interest Loan Contract?

1. Repayment Schedule: Detailed breakdown of payment dates and amounts

2. Security Details: Description and documentation of any collateral or security provided

3. Condition Precedent Documents: List of documents required before loan disbursement

4. Form of Drawdown Notice: Standard format for requesting loan disbursement

5. Know Your Customer (KYC) Requirements: List of required identification and verification documents

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Nigeria

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions

































Clauses



























Relevant Industries

Banking

Financial Services

Real Estate

Agriculture

Manufacturing

Retail

Construction

Small and Medium Enterprises

Technology

Healthcare

Education

Transportation

Energy

Relevant Teams

Legal

Finance

Credit Risk

Compliance

Treasury

Operations

Business Development

Collections

Documentation

Customer Relations

Relevant Roles

Chief Financial Officer

Finance Manager

Legal Counsel

Loan Officer

Credit Risk Manager

Compliance Officer

Financial Controller

Treasury Manager

Account Manager

Business Development Manager

Corporate Secretary

Risk Assessment Officer

Collections Manager

Documentation Specialist

Relationship Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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