Understanding a Loan Agreement in Plain Language
Translate key terms and spot the questions to ask.
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Help me read a loan agreement. Paste the terms I want explained (remove personal details): [LOAN_TERMS_TEXT]. The type of loan: [LOAN_TYPE]. What I plan to do with the loan: [PURPOSE]. Break the text into sections and restate each in plain language in one or two sentences. Build a table of key terms: amount, interest rate and type, total cost over the term, fees, repayment schedule, early repayment terms, what happens on late payment, security or collateral, and cancellation rights. Where the text does not say, write "not stated" and list the question to ask the lender. Highlight clauses that deserve extra attention without calling them unfair. Do not tell me whether to sign, and remind me to seek independent advice in [JURISDICTION] before agreeing, marking all legal statements [VERIFY]. Add a worked example on an invented clause so the method is visible: a late-payment clause that adds a fee and raises the rate after 30 days. Show the plain restatement, the numerical consequence on a sample balance, the question to ask the lender, and the reason the clause deserves attention. Add a checklist of twelve questions to answer before agreeing (total repayable, whether the rate can change, early repayment cost, what is secured, what happens on default, the cooling-off or cancellation right, how the lender communicates) with a column for the answer found in the text and a column for not stated. End with a cooling-off routine: wait at least a day, read the final document again, and speak to an independent advice service. I decide whether to sign; you only explain. Close with a one-page summary I can keep: amount, total repayable, rate and whether it can change, fees, security, the main penalties, and the date by which I must decide. Present options and their costs neutrally without picking investments for me. Remind me that tax and legal details vary by [JURISDICTION] and need checking with a professional.
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