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Security Clause In A Loan Agreement

Each amending clause should be read in great detail and well understood. It is a good idea for the customer to request a soft copy of the contract and carefully review the terms of the credit agreement. This clause is also known as the Money Market Condition Clause. Under this clause, the Bank reserves the right to change fixed interest rates in exceptional circumstances or in economic circumstances beyond control. Therefore, it is not true that a fixed interest rate remains “fixed” forever. This clause must be fully read and understood in order to avoid any dispute with the bank at a later date. This clause defines the coverage to be provided for the loan for the entire term of the loan. It is customary for the property to be acquired to be allocated as security for the loan made available. . . .