What is a Simple Money Bond?
A simple money bond is a document wherein a lender advances a loan to the borrower on certain terms and conditions. The object of the simple money bond is that it determine the terms and conditions between the lenders and the borrowers. The bond is binding on both parties and is enforceable by law when entered into by both parties.
Need For a Simple Money Bond?
A simple money bond ensures that the lender has a record of the transaction entered into between the lender and the borrower. It also records the terms and conditions by which the transaction has taken place. The document acts as proof as to what transaction has taken place between the lender and the borrower along with the consideration amount as well as the terms under which the transaction has taken place that eliminates foul play. The bond acts as an agreement between the parties and can be enforced by the law in case of a breach.
What should a Simple Money Bond cover?
A simple money bond must contain the following:
- Name of the lender and the borrower.
- Address of the lender and the borrower.
- The amount being lent/borrowed.
- The purpose for which the amount is being borrowed.
- The time period for which the amount is being lent.
- The interest to be levied on the amount.
- Details of the Property that is being mortgaged against the lending of the said amount (if any).
FAQ For a Simple Money Bond?
Q1.How to draft a bond?
Ans – Draft the terms of the bond, including the scope of work, payment terms, and any other relevant details.
Q2. Who can issue a bond?
Ans – Bonds are issued by governments and corporations when they want to raise money. By buying a bond,
Q3. Are money bonds safe?
Ans – Savings Bonds are backed by the full faith and credit of the United States, which has never defaulted on its debt.
Q4. What is a bond in simple terms?
Ans – A bond is simply a loan taken out by a company. Instead of going to a bank, the company gets the money from investors who buy its bonds.
Q5. What is the duration of a bond?
Ans – Measures the sensitivity of a bond’s price to changes in interest rates by calculating the weighted average time it takes to receive all the interest and principal payments.
SIMPLE MONEY BOND
I, ………….,…………………………………………………………………
S/O ______________________________________
of _____________________, have
this _________ day of _________ 20 _________
borrowed from………………………………………………….
S/O _____________________________________,
the sum of Rupees _____________ (in words _______________________________________________)
to be repaid by the following –
installments, namely, the sum of Rupees _________ on the _________day of _________, 20 _________, the sum of Rupees ______________on the _________day of _________, 20 _________ and the residue of the said sum of Rupees _____________(principal) on the __________________ day of _________, 20 _________, and shall pay, together with each instalment, interest at the rate ofRupees _________ per cent per annum upon the said principal sum of Rupees _________ or so much thereof as shall for the time being remain unpaid, but if the said installments are duly paid, without any deduction or default, the said interest shall be paid at the reduced rate of _________per cent per annum.
(Sd.)
………………………………………………….…….. in the presence of
____________________S/O ____________________
of__________________________________._______
