Third Party Loan Agreement for Singapore

Third Party Loan Agreement Template for Singapore

A Third Party Loan Agreement under Singapore law is a legally binding document that establishes the terms and conditions of a loan arrangement where a third party provides security or guarantee for the borrower's obligations. The agreement is governed by Singapore's Moneylenders Act, Civil Law Act, and related financial regulations, ensuring compliance with local interest rate caps, security requirements, and consumer protection measures. It details the loan amount, repayment terms, security arrangements, and the specific obligations of all three parties involved.

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What is a Third Party Loan Agreement?

The Third Party Loan Agreement is commonly used in Singapore when a borrower requires additional security to obtain loan funding, and a third party is willing to provide that security. This document is essential for protecting the interests of all parties involved - the lender, borrower, and guarantor - by clearly defining their respective rights and obligations. It must comply with Singapore's strict financial regulations, including the Moneylenders Act and MAS guidelines, particularly regarding interest rates and security arrangements. The agreement typically includes detailed provisions for loan disbursement, repayment schedules, events of default, and enforcement mechanisms.

What sections should be included in a Third Party Loan Agreement?

1. Parties: Identification of lender, borrower, and guarantor/third party

2. Background: Context of the loan and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of loan amount and intended use

5. Interest Rate: Interest rate terms and calculation method

6. Repayment Terms: Schedule and method of repayment

7. Security: Details of any security or collateral

8. Events of Default: Circumstances constituting default and consequences

9. Representations and Warranties: Statements of fact by parties

What sections are optional to include in a Third Party Loan Agreement?

1. Early Repayment: Terms for early loan settlement when early repayment is permitted

2. Assignment: Rights to assign the agreement when assignment rights are relevant

3. Insurance: Insurance requirements when insurance is required for the loan

4. Change of Circumstances: Provisions for material changes, typically included for longer-term loans

What schedules should be included in a Third Party Loan Agreement?

1. Repayment Schedule: Detailed payment dates and amounts

2. Security Documents: List and copies of security documents

3. Conditions Precedent: List of conditions to be met before drawdown

4. Form of Notices: Template notices for various communications

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

Jurisdiction

Singapore

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Industries

Moneylenders Act (Chapter 188): Primary legislation governing moneylending activities in Singapore, including licensing requirements, interest rate caps, and prohibited practices in moneylending

Civil Law Act (Chapter 43): Fundamental legislation governing contractual relationships, including requirements for valid contracts and rules regarding interest rates

Banking Act (Chapter 19): Regulatory framework for banking institutions, particularly relevant if any party to the loan agreement is a bank or financial institution

Contracts Act (Chapter 53): Legislation governing formation of valid contracts, capacity to contract, and consideration requirements in Singapore

Personal Data Protection Act 2012: Legislation governing the handling of personal data, consent requirements, and data protection obligations in Singapore

AML/CFT Requirements: Anti-Money Laundering and Countering the Financing of Terrorism requirements including KYC procedures and reporting obligations

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore affecting lending practices and compliance requirements

Consumer Protection Regulations: Various regulations designed to protect consumer interests in financial transactions and lending arrangements

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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