Documents that are related to Secured Advances
Documentation is a salient feature of, sound lending. The terms and condition under which the loan is sanctioned and the security accepted are put down in writing and signed by the borrower. Obtaining such agreement is called documentation. In documentation, each type or advance requires a different set of documents. The documents also depend upon the nature of security. The usual documents that associated with the secured advances are stated below:
- Promissory Note,
- Letter of continuity if O.D. is sanctioned,
- Letter of lien which must be adequately stamped,
- Letter of pledge or hypothecation duly signed by the borrower,
- Letter of a declaration by the borrower that the goods are according to specifications and he has got the right to pledge them and,
- Title deeds to property.
Secured advances mean loans made on the security of tangible assets like land, building, machinery, goods, and documents of title to goods. Such loans provide absolute safety to a banker by creating a charge on the assets in favor of him.
At last, we can say that these above documents are associated with the secured advances. Although there are no hard and fast rules about the documents to be taken and each bank has its own set of forms.