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The Personal Loan Contract With Collateral is essential for financial institutions and lenders operating in Nigeria who provide secured personal loans to individuals. This document is used when a borrower seeks a personal loan while offering specific assets as collateral to secure the loan amount. It is designed to comply with Nigerian banking regulations, financial laws, and security registration requirements, including the Central Bank of Nigeria guidelines and the Secured Transactions in Movable Assets Act. The agreement becomes necessary when the loan amount or risk profile requires collateral backing, providing the lender with security while offering potentially better terms to the borrower. It includes comprehensive details about the loan terms, collateral arrangements, rights and obligations of both parties, and enforcement mechanisms, all structured to be enforceable under Nigerian law.

1. Parties: Identifies and provides full details of the lender and borrower, including names, addresses, and any registration numbers

2. Background: Sets out the context of the loan agreement, including the borrower's request for the loan and the lender's agreement to provide it

3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty

4. Loan Amount and Purpose: Specifies the principal amount of the loan and its intended use

5. Interest Rate and Calculations: Details the applicable interest rate, calculation method, and payment schedule

6. Repayment Terms: Specifies the repayment schedule, payment methods, and any early repayment provisions

7. Collateral Details: Describes the assets being provided as collateral, including full identification and valuation

8. Security Interest: Creates and defines the security interest in the collateral, including registration requirements

9. Representations and Warranties: Contains statements of fact and promises made by the borrower regarding their situation and the collateral

10. Borrower Covenants: Lists ongoing obligations of the borrower, including maintenance of collateral and insurance requirements

11. Events of Default: Defines circumstances that constitute default and trigger remedies

12. Remedies: Outlines the lender's rights and remedies in case of default, including collateral enforcement

13. Notices: Specifies how and where formal communications between parties should be made

14. Governing Law and Jurisdiction: Confirms Nigerian law as governing law and specifies jurisdiction for disputes

15. Execution: Signature blocks and execution formalities