Like any legally binding agreement, a credit agreement has certain terminologies that are scattered throughout the contract. These terms have their own purpose in the credit agreement and it is therefore important to understand the meaning of these terms when designing or using a credit agreement. A subsidized loan is for students who go to school, and its claim to fame is that there is no interest while the student is in school. An unsubsidized loan is not based on financial need and can be used for undergraduate and graduate students. Loan Transfer: When the loan reaches a transfer point, the transfer right section is filled in so that it can be transferred to another party. The party should be involved in the signing of that party. Yes, you can draft a personal loan agreement between your family members. A loan agreement is a written agreement between a lender and a borrower. The borrower promises to repay the loan according to a repayment schedule (regular payments or lump sum). Most loans, often personal loans, are often made on verbal communication. This puts the lender at risk and many have often experienced the disadvantages. This underscores the importance of having a loan agreement handy and including it in the loan process. A loan agreement is not only legally binding, but also secures the lender`s money during the loan repayment period.