MODEL FORM OF LOAN BOND WITH SURETY AND

MODEL FORM OF LOAN BOND WITH SURETY AND HYPOTHECATEION OF PROPERTY
This Loan Bond is executed on this……….day of…………at ………………….. between:
1. Mr. TH s/o MY r/o ………………..hereinafter called the debtor on the First Part.
2. Mr. LA s/o Mr. WM R/o ……………….., hereinafter called the surety on the second
part, and
3. MJ, s/o Mr. BU r/o ………………….., hereinafter called the creditor on the third
part.
Whereas the debtor has applied for a loan of Rs………which shall be
repayable in instalments as specified hereunder with interest at the rate of 18% per annum.
And whereas the surety has agreed to give security for the above loan
and the creditor has agreed to advance the loan on such security.
NOW THIS BOND WITNESSES AS UNDER :
1. That in pursuance of the said agreement the creditor has advanced a sum of
Rs…….to the debtor. The debtor and surety have jointly and severally agree with
the creditor as under:2. That the debtor and the surety are jointly and severally responsible for repayment of
the above amount in four equal instalments with interest on half yearly basis as
under :INSTLAMENTS DUE DTEA PRINCIPAL AMOUNT INTEREST
1st instalment ……………
2nd instalment ……………
3rd instalment ……………
4th instalment ……………
……………
……………
……………
……………
………………
………………
………………
………………
3. That in case of failure to pay any instalment or part thereof with interest, the debtor
amount alongwith interest shall become payable at once and the debtor and the surety shall
be jointly and severally liable to pay the same.
4.
That for the consideration aforesaid and in further pursuance of the aforesaid
agreement the debtor and the surety grant and transfer by way of simple mortgage to the
creditor. All that property described in the shall remain and be charged by way of simple
mortgage as security for the payment to the creditor of the said principal amount alongwith
interest in accordance with the covenants herein contained.
5.
The debtor and the surety hereby declare that the said property is free form all
encumbrances.
6.
That it is hereby agreed and declared that in cases of failure of the part of debtor to pay
the instalment in time, the creditor shall be entitled to dispose the mortgage property in part
or full to recover the principal amount and interest.
We the above noted parties have signed this deed on the date and place mentioned
above, after fully understanding the contents of this deed in the presence of the following
witnesses:
Witnesses:
1.
Name………….
Address…………
2.
Name……………
Address………….
Signature …………..
Debtor
Signature………………
Surety
Signature…………….
Creditor