Loan Settlement Agreement Template for Indonesia

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Key Requirements PROMPT example:

Loan Settlement Agreement

"I need a Loan Settlement Agreement under Indonesian law for a corporate borrower settling a secured term loan of IDR 5 billion with our bank through a 15% discounted lump sum payment, with settlement completion required by March 2025."

Document background
The Loan Settlement Agreement is a crucial document used in Indonesian banking and financial transactions when parties wish to formalize the settlement of an existing loan obligation. It is particularly relevant when the original loan terms need to be modified, restructured, or settled in full through an alternative arrangement. This agreement, governed by Indonesian law and banking regulations, typically includes detailed provisions about the settlement amount, payment terms, releases, and security arrangements. It's essential when parties want to document the final settlement of a loan, whether it's being settled at a discount, through a restructured payment plan, or via a lump sum payment. The document must comply with Indonesian Civil Code requirements and relevant Financial Services Authority (OJK) regulations, making it a key instrument in resolving loan obligations while providing legal certainty to all parties involved.
Suggested Sections

1. Parties: Identification of the lender and borrower, including their complete legal names, addresses, and authorized representatives

2. Background: Recitals detailing the original loan agreement, current outstanding amount, and parties' intention to settle

3. Definitions: Definitions of key terms used throughout the agreement

4. Acknowledgment of Debt: Clear statement of the outstanding loan amount and acknowledgment by the borrower

5. Settlement Terms: Detailed terms of settlement including settlement amount, payment method, and timeline

6. Payment Mechanism: Specific details about how and where payments will be made, including bank account details

7. Release and Discharge: Provisions regarding mutual release of claims upon completion of settlement obligations

8. Representations and Warranties: Standard representations by both parties regarding authority and capacity to enter into agreement

9. Default Provisions: Consequences of failing to comply with settlement terms

10. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

11. Notices: Process for delivering formal notices between parties

12. Entire Agreement: Confirmation that this agreement supersedes all prior agreements regarding the settlement

13. Execution: Signature blocks and execution requirements

Optional Sections

1. Guarantor Provisions: Required when the original loan involved guarantors who need to be party to the settlement

2. Collateral Release: Needed when the original loan was secured by collateral that needs to be released

3. Tax Provisions: Detailed tax arrangements when settlement involves significant tax implications

4. Confidentiality: When parties require specific confidentiality obligations regarding the settlement terms

5. Corporate Authorizations: Required when either party is a corporation needing specific board approvals

6. Installment Schedule: When settlement involves payments in installments rather than lump sum

7. Force Majeure: When parties want specific provisions for unforeseen circumstances affecting settlement

8. Assignment: When rights under the settlement agreement may need to be assignable

Suggested Schedules

1. Schedule 1 - Original Loan Details: Copy or summary of original loan agreement and amendments

2. Schedule 2 - Calculation of Settlement Amount: Detailed breakdown of the settlement amount including principal, interest, and any discounts

3. Schedule 3 - Payment Schedule: If applicable, detailed schedule of installment payments

4. Schedule 4 - Release Documents: Forms of release documents to be executed upon completion

5. Schedule 5 - Collateral Details: If applicable, list and description of collateral to be released

6. Appendix A - Corporate Authorizations: Copies of relevant corporate approvals and authorizations

7. Appendix B - Power of Attorney: If applicable, powers of attorney for signing or implementing the agreement

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Legal Services

Corporate Finance

Real Estate

Manufacturing

Retail

Construction

Infrastructure

Agriculture

Mining

Technology

Healthcare

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Secretariat

Debt Recovery

Account Management

Banking Operations

Corporate Finance

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Loan Officer

Credit Manager

Risk Manager

Treasury Manager

Account Manager

Debt Recovery Specialist

Compliance Officer

Financial Controller

Banking Relationship Manager

Corporate Secretary

Restructuring 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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