Secure Your Money: Loan for Consumption & Vehicle Pledge Agreement

Protect your financial interests with a legally binding agreement.

Why Do You Need a Written Loan & Pledge Agreement?

Lending involves providing funds in exchange for interest, but clear terms are essential for both security and compliance. A written Loan Agreement ensures:

Legal protection for both parties.
Defined rights, obligations, and repayment terms.
A binding reference in case of disputes.

A Pledge secures the loan with collateral, reducing risk. Proper documentation saves time, prevents conflicts, ensures smooth transactions, and strengthens relationships.

Critical Legal Requirement

This is a secured agreement involving collateral. To ensure legal validity and transparency, the agreement must be in writing and include the signatures and thumbprints of all parties involved.

What is Included in This Template?

We provide clear, practical, and ready-to-use contract templates that save time and ensure enforceability under Cambodian law. Key provisions include:

Clear identification of both parties.
Guarantee of ownership rights from the lessor/pledgor.
Detailed description of collateral property and ownership documentation.
Rights and obligations of each party.
Terms for contract termination and renewal.
Dispute resolution process and compensation claims.

Important: Interest & Penalties

If your agreement includes interest or late payment penalties, Cambodian law strictly requires a written contract signed by all parties to be enforceable.

Pro Tip: Structuring Repayment

Clearly define the repayment method for both principal and interest. For example: "Repay the principal at the end of the term and pay interest monthly."

Who Should Use This Template?

For Lenders:

Protect your rights and financial interests.
Create legal evidence for disputes.
Formally bind the borrower to their commitments.

For Borrowers:

Clarify your rights and obligations.
Establish a clear framework to understand and fulfill responsibilities.

Frequently Asked Questions

Parties can use movable property (e.g., vehicles) as collateral to guarantee the loan. The collateral should generally be of equal or greater value than the loan amount. This provides security to the lender, granting rights to enforcement or foreclosure if the borrower defaults.

Khmer citizens and foreign nationals residing in Cambodia can enter this agreement, provided they have full legal capacity (e.g., not minors or under guardianship). The agreement must be made with mutual consent, free from coercion or threats.

An agreement may be invalid if it violates the law or public order. Key considerations include:

Essential Conditions: Ensure all validity conditions (consent, capacity, object, cause) are met.
Form Conditions: While verbal agreements exist, a written contract is crucial for evidence.

Additionally, ensure you specify:

Principal amount and currency (KHR or USD).
Interest rates and penalties (must be written).
Collateral details (history and ownership).

A properly formed agreement benefits everyone by:

Giving lenders repayment assurance.
Protecting borrowers with transparent terms.
Creating legally binding obligations.
Preserving relationships through clarity.
Providing sufficient evidence in case of disputes.

Flexibility for Both Parties

Parties can define specific rights and obligations based on mutual agreement, provided they do not contradict Cambodian laws or public order.