Termination Of Loan Agreement Meaning

Back to the banking law, the repayment date of the loan should not be reserved in favour of both parties and this expense can be settled differently in the contract signed by the bank with the customer. The parties may decide that the bank may require repayment of the loan before the agreed date and that the borrower has the right to repay the loan at any time before the final repayment date and that the bank will not be able to object to the loan, i.e. to prepay the loan. In practice, the deadline for the bank is not met in market contracts. However, they can find solutions that allow the borrower to prepay the loan. Sometimes it is a matter of paying fees in the form of commissions. First, the Bank has the right to terminate the loan agreement if the borrower has not met the conditions for granting the loan. The occurrence of such an event forms the basis for the Bank`s closing of the loan or the reduction in its amount. On the other hand, if the borrower died before the bank repays the loan, the debt on the payment of the loan is not hereditary. In this case, the loan agreement expires. Credit documents between a bank and a borrower can vary considerably depending on the size of the credit.

The syndicated loan includes a facility agent or security guard, as well as long and comprehensive agreements that have been negotiated vehemently by legal advisors. At the other end of the spectrum is a single bank-provided basic credit facility based on the Bank`s Terms and Conditions (GBC).1 In August 2015, the Court of Appeal of `s-Hertogenbosch ruled that the validity of a termination must be determined, among other things, by: (i) the reasons for the bank`s termination; (ii) if the reasons for the termination have been communicated to the borrower; (iii) the notice applied by the Bank.6 The Bank also has the right to regularly check solvency after the loan is granted. Under section 74 of the Bank Act during the term of the loan agreement, the borrower is required to provide, at the request of the bank, the information and documents necessary to assess his financial and economic situation and to control the use and repayment of the loan. If, during the term of the loan agreement, the borrower was not required to provide the above information and documents to the bank, this could be an argument in favour of the bank because it has lost its solvency and therefore does not wish to be audited. In addition to the willingness of the parties who can set the rules for early repayment of the loan, the derogation from the repayment period for both parties of the loan agreement is also the solution provided for in Article 75 bis, paragraph 2, of the banking law. This applies to medium- and long-term loans. If the borrower has agreed to a repayment date of more than one year, the borrower can terminate the contract with a three-month period. The termination of the loan agreement in this mode is not subject to conditions, i.e. the borrower can terminate the contract without justification. The termination of the loan agreement is terminated after three months and the borrower is required to repay the debt within that time.

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