In the lending industry, loan companies will often times allow borrowers to request for extensions to their contract. It allows the contract to extend its maturity date and allows for amendments to the previous contract. An extension will also allow for a new termination date.
The main purpose of a loan extension agreement letter is to facilitate the agreement process for both parties by avoiding the need to create and agree upon an entirely whole new contract. Below, you will find a loan extension template that you can use as a guide.
Provisions of a Loan Extension Agreement
A loan extension agreement letter has several provisions that must be included in order to avoid any misunderstandings between the two parties involved.
• Parties – It is very important to indicate the names of both parties involved and their position in the agreement. Make sure that its clear who is the “borrower” and who is the “lender”.
• Dates – Dates are very important in every agreement. Make sure to include the date of when the contract was created. The other date that you need to include is the maturity date of the loan.
• Loan information – The loan information also includes the maturity date as well as the date of the original promissory note. You also need to include the amount of the loan in this portion of the agreement.
• Signatures – Signatures are important for every contract. When you sign the agreement, make sure to have a witness, such as a notary.
Loan Extension Agreement Letter – Sample
This Loan Amendment and Extension Agreement, dated as of March 14, 2014, is entered into by “Borrower” and “Lender”.
WHEREAS, the Lender has loaned the following amount of [$6,000] to the Borrower by the “Original Agreement/Contract” dated [January 15th, 2014] with an original maturity date of “[October 15th, 2014].” When the amendments are applicable, include it in the contract.
Terms of Repayment and Prepayment:
The parties agree to extend the original contract for an additional period of time, which will begin as soon as the original time period expires and will end on “[October 15th, 2014]”.
All other terms and conditions included in the Original Contract remain unchanged.
(Lender Printed Name)
(Borrower Printed Name)