Document background
The Loan Offset Agreement is utilized when a borrower and lender wish to establish an arrangement where the interest payable on a loan is reduced by reference to the balance maintained in a linked deposit account. This document is particularly relevant in the Belgian banking sector, where such arrangements must comply with specific regulatory requirements and the Belgian Civil Code. The agreement typically follows the execution of a main loan agreement and establishes the mechanics of the offset arrangement, including calculation methodologies, account management rules, and parties' rights and obligations. The Loan Offset Agreement needs to address various scenarios such as multiple account holders, security interests, and termination events, while ensuring compliance with Belgian banking regulations and consumer protection laws where applicable.
