Legal analysis of credit agreements

A credit agreement is an important part of business and financial services in Ukraine, so the analysis of credit agreements is important for businesses and citizens who plan to take a loan. A qualitative legal analysis of the loan agreement will help to identify potential risks and make an informed choice regarding lending.

What is a credit agreement?

A credit agreement is a document that specifies the terms of credit between the creditor and the debtor. The loan agreement contains information about the amount of the loan, the term of its repayment, the interest rate, commissions and other conditions of lending.

What criteria should be taken into account when analyzing a credit agreement?

Analysis of the credit agreement should be carried out taking into account the following criteria:

• Amount of credit. You need to check whether the credit limit is sufficient for your needs and does not exceed your ability to repay the loan.
• Loan term. You need to consider the term of the loan because it affects the total amount you have to pay back.
• Interest rate. It is important to pay attention to the interest rate that will be applied to the loan, because it affects the total amount that you will have to pay.
• Commissions and other payments. It is necessary to check whether there are additional commissions and other payments that must be paid when lending.
• Loan repayment conditions. It is necessary to take into account the conditions of loan repayment, in particular, the possibility of early repayment, fines for delays and other conditions.
• Risks. It is necessary to consider the risks associated with the loan, in particular, the possibility of non-payment of the loan, loss of the workplace and other factors.

What advantages can a legal analysis of a credit agreement have?

Legal analysis of the loan agreement has several advantages:

• Helps to understand credit terms and risks associated with credit.
• Allows you to determine whether the loan product is profitable and suitable for your needs.
• Helps to avoid unpleasant surprises during loan repayment.
• Allows you to determine whether the cost of the loan is in line with market conditions and competition in the market.

How is the loan agreement analyzed?

To analyze a credit agreement in Ukraine, you need:

• Familiarize yourself with the lending conditions specified in the loan agreement.
• Check whether all credit terms are described in detail and are clear.
• Check the interest rate and all other payments that must be paid during the loan.
• Check the terms of loan repayment and the possibility of early repayment.
• Take into account all the risks associated with the loan.
• Check the conditions that apply to guarantors and sureties.
• Carefully check all other terms of the loan agreement.
• Compare the terms of the credit agreement with the terms of other credit products offered on the market.
• Consult specialists if there are any unclear or disputed clauses in the credit agreement.