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Loan Agreement With Collateral for Indonesia

Loan Agreement With Collateral Template for Indonesia

A comprehensive legal document governed by Indonesian law that establishes the terms and conditions of a loan facility secured by specific collateral. The agreement complies with Indonesian Civil Code requirements and relevant financial regulations, including OJK guidelines. It details the loan amount, interest rates, repayment terms, and security arrangements, while incorporating specific provisions for collateral creation, perfection, and enforcement under Indonesian security laws. The document includes necessary safeguards for both lender and borrower, ensuring compliance with local banking regulations and consumer protection requirements.

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What is a Loan Agreement With Collateral?

The Loan Agreement With Collateral is a crucial document used in Indonesian financing transactions where a lender provides funding secured by specific assets as collateral. This agreement is essential for both commercial and consumer lending, structured to comply with Indonesian banking laws, OJK regulations, and security interest requirements. It is commonly used when significant loan amounts are involved or when lenders require additional security beyond personal guarantees. The document incorporates mandatory provisions under Indonesian law, including specific requirements for security creation, perfection, and enforcement. It is particularly relevant in contexts where assets such as real estate, equipment, inventory, or accounts receivable are pledged as security, and must conform to Law No. 42 of 1999 on Fiduciary Security and/or Law No. 4 of 1996 on Land Mortgage, depending on the type of collateral involved.

What sections should be included in a Loan Agreement With Collateral?

1. Parties: Identification of the lender and borrower with complete legal names and addresses

2. Background: Context of the loan arrangement and purpose of the facility

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Loan Facility: Details of the loan amount, purpose, and basic terms

5. Interest and Fees: Interest rate, calculation method, fees, and charges

6. Disbursement: Conditions precedent and procedures for loan disbursement

7. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

8. Security and Collateral: Description of collateral, security creation, and perfection requirements

9. Representations and Warranties: Standard and specific representations by the borrower

10. Covenants: Positive and negative covenants of the borrower

11. Events of Default: Circumstances constituting default and consequences

12. Enforcement Rights: Lender's rights and remedies upon default, including collateral enforcement

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Choice of Indonesian law and jurisdiction provisions

15. Miscellaneous: Standard boilerplate provisions including amendments, assignments, and severability

What sections are optional to include in a Loan Agreement With Collateral?

1. Guarantees: Required when there are third-party guarantors for the loan

2. Insurance: Detailed insurance requirements when specific insurance coverage is required for the collateral

3. Tax Provisions: Detailed tax provisions when complex tax implications exist or for cross-border transactions

4. Security Trustee: Required in syndicated loans or when a security trustee structure is used

5. Currency Provisions: Required for loans denominated in foreign currency or involving currency conversion

6. Additional Obligors: Needed when multiple borrowers or security providers are involved

7. Subordination: Required when there are multiple creditors or existing debt to be subordinated

What schedules should be included in a Loan Agreement With Collateral?

1. Schedule 1 - Loan Details: Detailed breakdown of loan amount, interest rates, and payment schedule

2. Schedule 2 - Collateral Description: Detailed description and documentation of all collateral assets

3. Schedule 3 - Conditions Precedent: List of all documents and conditions required before disbursement

4. Schedule 4 - Form of Disbursement Request: Standard form for requesting loan disbursements

5. Schedule 5 - Security Documents: Forms of security documents required for the collateral

6. Schedule 6 - Perfection Requirements: List of required filings and registrations for security interests

7. Appendix A - Repayment Schedule: Detailed amortization schedule with payment dates and amounts

8. Appendix B - Required Insurance: Specific insurance requirements for the collateral

Authors

Alex Denne

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

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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