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Memorandum Of Understanding For Loan Agreement Template for Singapore

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Memorandum Of Understanding For Loan Agreement

"I need a Memorandum Of Understanding For Loan Agreement between my company as lender and a small business borrower, for a secured loan of SGD 500,000 with a 24-month term starting March 2025, with quarterly repayments and property collateral."

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What is a Memorandum Of Understanding For Loan Agreement?

The Memorandum of Understanding For Loan Agreement is commonly used in Singapore when parties wish to document their preliminary understanding regarding a loan transaction before proceeding with a formal loan agreement. It typically includes key commercial terms, conditions precedent, and any special requirements under Singapore law. This document is particularly useful when parties need to obtain internal approvals, conduct due diligence, or negotiate detailed terms while maintaining confidentiality. While not fully binding, it provides a clear framework for the subsequent loan agreement and helps prevent misunderstandings between parties.

What sections should be included in a Memorandum Of Understanding For Loan Agreement?

1. Parties: Identification and details of the lender and borrower

2. Background: Context and purpose of the loan arrangement

3. Definitions: Key terms used throughout the MOU

4. Loan Amount: Specified amount to be loaned

5. Interest Rate: Agreed interest rate and calculation method

6. Repayment Terms: Schedule and method of repayment

7. Duration: Term of the loan and MOU validity

What sections are optional to include in a Memorandum Of Understanding For Loan Agreement?

1. Security/Collateral: Details of any assets provided as security - use when loan is secured against assets

2. Early Repayment: Terms for early loan settlement - use when early repayment options are offered

3. Default Provisions: Consequences of payment default - use for larger or commercial loans

4. Assignment Rights: Rights to assign the loan to third parties - use for transferable loans

What schedules should be included in a Memorandum Of Understanding For Loan Agreement?

1. Repayment Schedule: Detailed breakdown of payment dates and amounts

2. Security Details: Detailed description of collateral or security arrangements

3. Condition Precedents: List of conditions to be met before loan disbursement

4. KYC Documents: Required identification and verification documents

Authors

Alex Denne

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

Relevant legal definitions



























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Industries

Moneylenders Act (Chapter 188): Primary legislation governing money lending activities in Singapore, including interest rate restrictions and licensing requirements for moneylenders

Banking Act (Chapter 19): Core legislation regulating banking institutions and their lending activities in Singapore

Civil Law Act (Chapter 43): Fundamental legislation governing civil law matters, including contract principles and remedies

Contract Law: Common law principles governing formation and enforcement of contracts in Singapore

Moneylenders Rules: Subsidiary legislation providing detailed regulations for money lending operations

Banking Regulations: Detailed rules and guidelines governing banking operations and lending practices

Consumer Protection (Fair Trading) Act: Legislation protecting consumers from unfair practices in transactions, including loan agreements

Personal Data Protection Act 2012: Legislation governing the collection, use, and disclosure of personal data in Singapore

Unfair Contract Terms Act: Legislation controlling the use of unfair terms in contracts and protecting parties from unreasonable contract conditions

Stamp Duties Act: Legislation governing stamp duty requirements for legal documents including loan agreements

Limitation Act: Legislation setting time limits for bringing legal actions and enforcing agreements

Bankruptcy Act: Legislation governing bankruptcy proceedings and creditor rights in default scenarios

Evidence Act: Legislation governing the admissibility of evidence and documentation requirements in legal proceedings

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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