What is a 'Credit Agreement'

A credit agreement is a legal contract in which a bank arranges to loan a customer a certain amount of money for a specified amount of time. The credit agreement outlines all the rules and regulations associated with the contract. This includes the interest that must be paid on the loan.

BREAKING DOWN 'Credit Agreement'

A credit agreement can be a lengthy and detailed document that explains all the terms of the contract. For the most part, all types of loans (ranging from credit cards to mortgages) have some sort of credit agreement, which must be signed and agreed upon by both the bank or lender and the customer - the contract does not come into effect until the document has been signed by both parties.

RELATED TERMS
  1. Friendly Loan

    A loan agreement between associates. This type of loan is known ...
  2. Closed-End Credit

    A loan or extension of credit in which the proceeds are dispersed ...
  3. Loan

    The act of giving money, property or other material goods to ...
  4. Available Credit

    The unused portion of an open line of credit, such as a credit ...
  5. Consumer Credit

    A debt that someone incurs for the purpose of purchasing a good ...
  6. Open-End Credit

    A pre-approved loan between a financial institution and borrower ...
Related Articles
  1. Small Business

    Small Business Loan Vs Line of Credit: How They Differ

    Understand the differences between a small business loan and a line of credit, and learn some of the most appropriate uses for each form of financing.
  2. Personal Finance

    The Basics Of Lines Of Credit

    Lines of credit are potentially useful hybrids of credit cards and normal loans. Learn how a line of credit can help (and hurt) your finances, and how to find the best one to suit your needs. ...
  3. Personal Finance

    How To Apply For a Personal Loan

    Learn about different avenues for applying for a personal loan, and learn valuable tips to help you get your personal loan application approved.
  4. Tech

    Good Credit? Try This Credit Card Alternative

    Personal loans are a credit card alternative to try if you've got great credit and you want to lock in a lower interest rate on what you borrow. [underlined word is credit card alternative]
  5. Personal Finance

    Build Your Credit Score

    Here are four good ways to build your credit score when you're starting from scratch. Do it right and you'll end up with excellent credit.
  6. Managing Wealth

    When Are Personal Loans a Good Idea?

    You never want to borrow money for frivolous reasons, but these five circumstances might warrant it.
  7. Personal Finance

    Personal Loans: To Lend Or Not To Lend?

    Attempting to help a loved one with a cash loan can put a strain on your relationship - and your bank account.
  8. Personal Finance

    Is Your Credit Score at 850? It Can Be!

    Use these tips to increase your credit score and your ability to get low interest rates on loans.
  9. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  10. Personal Finance

    Understanding Term Loans

    A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate.
RELATED FAQS
  1. What is the difference between a loan and a line of credit?

    Learn to differentiate between lines of credit and standard loans, and determine when you are likely to use each method of ... Read Answer >>
  2. What is the difference between "closed end credit" and a "line of credit?"

    Find out about the difference between closed-end credit and lines of credit, and how both closed- and open-end credit is ... Read Answer >>
  3. Is it possible to have a credit limit that's too high?

    Avoid these pitfalls when working with high credit limits, and learn how to increase your credit score by increasing your ... Read Answer >>
  4. Is a home equity loan a good way to pay off my credit card debt?

    Learn about the characteristics of a home equity loan and how it can be used to help you pay off your outstanding credit ... Read Answer >>
Trading Center