LOAN INSURANCE COVER AGREEMENT
(Pre-Disbursement Insurance Cover Fee – 2.5%)
This Loan Insurance Cover Agreement (“Agreement”)
Collectively referred to as the “Parties”.
1. Purpose of Agreement
This Agreement establishes the terms and conditions under which the Borrower shall pay a Loan Insurance Cover Fee equivalent to 2.5% of the approved loan amount prior to the disbursement of the loan by the Lender. The insurance cover fee serves as a financial protection mechanism for administrative risk management, loan security, and processing assurance.
2. Loan Insurance Cover Fee
The Borrower agrees to pay a refundable Loan Insurance Cover Fee of Two and One-Half Percent (2.5%) of the total approved loan amount.
Example:
If the approved loan amount is $100,000, the required insurance cover payment shall be $2500 (2.5%).
This payment must be made before the loan funds are released.
3. Payment Condition Prior to Loan Release
The Borrower acknowledges and agrees that:
The Loan Insurance Cover Fee must be paid in full before loan disbursement.
The Lender shall not release, transfer, or disburse any loan funds until the insurance cover fee has been received and confirmed.
Payment of the insurance cover fee constitutes acceptance of all terms contained in this Agreement.
4. Nature of the Insurance Cover Fee
The Loan Insurance Cover Fee shall:
Serve as risk mitigation and administrative coverage for the loan processing and lending operations.
The 2.5% insurance coverage fee shall serve as security and collateral for the loan amount disbursed to the borrower. This fee is fully refundable, subject to the borrower’s complete repayment of the loan in accordance with the terms and conditions of the loan agreement. Upon full settlement of the outstanding loan balance, the insurance coverage fee shall be refunded to the borrower without delay, in line with the agreed contractual obligations.
6. Compliance and Legality
Both Parties agree that this Agreement shall be governed by and interpreted in accordance with applicable financial and commercial laws within the jurisdiction in which the Lender operates.
7. Entire Agreement
This document constitutes the entire agreement between the Parties regarding the loan insurance cover payment requirement prior to loan disbursement.
