Whether you are the person lending money or the lender, a contract is a necessity. The use of a credit agreement is prudent in such cases, as it protects the borrower. The predefined terms of the loan are clear in the document. Paperwork also provides protection to the lender. This is due to the fact that the document serves as proof of the terms of the loan and what the borrower has agreed to repay. In the event that the borrower is late in the loan, the borrower is responsible for all costs, including any attorney`s fees. Under no circumstances is the borrower always responsible for the payment of the principal and interest in case of delay. It is enough to enter the State in which the loan was contracted. If a disagreement subsequently arises, a simple agreement serves as evidence for a neutral third party such as a judge who can assist in the application of the treaty. .