understanding terms and conditions of private money lender

[Frank Celio]

I am new in Real Estate and was approached by a money lender in a FB group page. He told me he could finance my first real estate deal at 4% on the loan. I liked the interest rate but I asked him what were his terms and conditions. He emailed them to me today and after reading them realized that I better try and seek help from someone that understands these terms better than I do. Can someone please please give me some good advise as to whether these terms and conditions are favorable to me in using to finance my first property? Also if there are ANY important questions i need to ask regarding these terms and conditions? I sure dont want to lose my shirt my very first time investing. Was hoping to invest in a multi-family investment or a quick flip deal. He also told me that credit didn't matter. I will post them below so all can see. thank you thank you in advance for all your help

                                                                                         Frank

Hello Frank,

Following the recent conversation we had regarding the loan, below are the terms and conditions for the loan, kindly review them.

Loan terms and Conditions*

*Subject to approval. Certain conditions apply.

The following sets out the rights and obligations between you and this company.

*. No credit check.
*.There is 6 months grace period.
*.There may be forbearance options available to postpone payments.
*.The interest rate is fixed at 4%.


Definition

1. The Loan

The Loan If I accept this contract, I will lend you the amount of credit you have offered to borrow. This amount is stated on the contract under “Total Amount of Credit”. You authorize me to distribute the loan in the way set out under “Who I will pay your loan to” this could be the same day. The total amount, including interest which you will have to pay is set out under “Total amount of repayments”.

2. How is interest calculated

I calculate interest payable by you by applying the daily percentage rate of interest to the unpaid monthly balances under this contract. The unpaid monthly balance is the amount you owe me at the end of any particular day (Pacific Time), and is the difference between all amounts credited and all amounts debited to your account at the end of the monthly on any particular day. If you payout all the monies owing under this contract, then interest for the period from the last debit date up to but excluding the payout date will be debited on the payout date. Under this contract, accrued interest debited on a day will not include interest relating to that day.

3. Repayment

You must repay the Total Amount of Credit plus the interest charges by monthly repayments. The amount of each repayment is stated under “Amount of each repayment”. You must pay the first repayment on the date stated under “Repayments”. After that, you must pay a repayment on the same day of each following month. You must make the number of repayments stated under “Number of repayments” for the period stated under “Period of repayments (loan term)”, and pay the balance owing under this contract on the date the final payment is due. You agree not to deduct anything from any such repayment. This means you cannot deduct anything that you claim I owe or could in the future owe you.

You must make payments to me by any of the following methods;



i) by direct debit bank transfer

ii) by telephoning my office with your credit card details

iii) western union/money gram

4. Security

Security provision is handled by borrower outside the loan(Loan Protection Insurance/ Payment Protection Insurance{LPI/PPI}). The insurance covers the repayment obligation on your loan to the extent agreed upon in the contract in the event of you becoming unemployed or incapacitated for work.

5. Loan Origination
Loan origination refers to the initiation and completion of the process when you submits your financial information to us for loan processing , once our loan is submitted to us, our underwriter will decision the application, either approving, suspending, or declining the loan.

5.1 Loan Origination Fee.
This loan origination fee is the only payment our client has to pay before disbursement of funds can be made to our clients. this fee is legalized by the US lending policy in compliance with the world bank, this fee is basically the originator's commission for getting you a loan, Go figure, as soon as this fee is paid, then disbursement of funds follows immediately after signing the loan contract agreement.

6. Termination Of Loan Loan

6.1 may, at any time after any amount of the Loan granted to the Borrower is cancelled by the Borrower or deemed by us to be cancelled resulting in the net loan amount of the Loan being reduced to less than $100, terminate the Loan by notice to the Borrower, in which event all obligations and liabilities there under shall become immediately due and payable.

6.2 Notwithstanding any other provision in these Terms and Conditions, in the event that the each bi-monthly installment payable by the Borrower under the Loan is less than $100 for any reason what so ever, I may at any time thereafter terminate the Loan by notice to the Borrower, in which event all obligations and liabilities there under hall become immediately due and payable.

7. Commissions paid to or by me

A commission is payable by me under “Who I will pay your loan to” to me, and to the sales consultant named on this contract. The amount of commission payable is unascertainable as at the Disclosure date of information. A commission is payable to the company named under “Who I will pay your loan to” by me for the introduction of credit business. The amount of commission is unascertainable as at the Disclosure date of information.

8. Things you must not do

You must not;

i) commit an act of bankruptcy; or

ii) fail to pay me on time any money you have to pay me under this contract; or

iii) pay any repayment/s with a check, direct

debit or other instrument that is subsequently dishonored by a bank; or

iv) fail to comply with any condition of this loan contract; or

v) make any material false or misleading representation.

9. I may end this contract in certain circumstances

I am entitled to give you a written notice requiring you to correct any default of this contract. If you don’t do the things specified in the written notice within 30 days I can require you to pay me whatever money you owe to me under this contract. The money you owe to me includes the unpaid balance of the loan, any other accrued interest, any fees and charges due and owing and any enforcement expenses. If the law does not require me to do so, I do not have to give you a written notice before I can require you to pay me whatever money you owe to me under this contract. In addition, subject to the Consumer Credit Code, I may exercise my other rights under this contract, and any right available to me under law.

10. Default

Having followed the terms of the Consumer Credit Code, 1995 and without affecting my right to demand repayment at any time, I may demand repayment if any of the following happen (defaults): if you fail to pay any money you owe me on the date it is due and this failure last for more than 30 days after I have written to tell you that the amount is overdue; if you break any of the terms and conditions of this agreement and you do not resolve the position within 30 days after I have written to tell you to do so;

if you or your guarantor die or do something which could lead to bankruptcy;

if your guarantor serves me with a notice that he or she will no longer act as your guarantor

if any decree, judgment or order of court is obtained against you and you do not pay it within one month from the date it was issued;

if any information supplied for or by you in application for the credit facility was false, misleading or inaccurate;

if you do not provide me with the security within 10 days after I have written to ask you for it or within any extra time I may allow; if the security is also security for other money you owe me (or any of our subsidiaries) and the security becomes enforceable to pay any of the other money.

11. Enforcement expenses

Enforcement expenses may become payable under this contract in the event of a breach. I may debit these expenses to your account. They will become immediately due for payment once debited. Enforcement expenses may include solicitors’ legal costs and the reasonable expenses of my staff and my facilities incurred in relation to any enforcement.

12. Change of circumstances and address

You must tell me promptly if you change your residential or postal address, or if you think there is any information that I should be aware of about your ability to comply with this contract.

13. Notices

Any notice or demand given by me under this contract or required by law may be given in writing, can be signed by any of my officers, and can be delivered personally or by email to the address you have nominated for delivery of notices, or if no such address has been nominated by you, your email address as last known to me. Any such notice or demand shall be deemed to have been received by you when it would have been delivered in the ordinary course of post.
Borrowers should be informed that we do not take out the Loan Protection Insurance/ Payment Protection Insurance from the capital loan amount due to an hard insurance policy.

14. Joint and several liability

If you are two or more persons, your obligations as debtors are both joint and several.

15. Date of Contract

This contract takes effect on the date that I accept your offer to borrow.

16. Assignment

I may deal with, assign or transfer to any person or company any of my rights and interests under this contract.

17. Consumer Credit Code and other laws

To the extent that any provisions or parts of this loan contract are inconsistent with the Consumer Credit Code or other laws, they will be deleted so that the rest of the contract shall remain valid and enforceable. All disclosures under this contract are made on the basis of assumptions permitted by the Consumer Credit Code.

18. Information

The Borrower shall supply us immediately upon request all requested details, information, materials, and explanation (except information of a proprietary nature) regarding the operations and finances of the Borrower as may be reasonably required from time to time.

19. Governing Law

.The Loan shall be governed by and construed in accordance with the laws of the jurisdiction in which the Borrower carries on business.

If you are comfortable with these terms and conditions as set out, kindly inform me, i look forward to your prompt response. thank you.

Best Regards,