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Loan Extension Agreement for United Arab Emirates

Loan Extension Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that formalizes the extension of an existing loan facility between a lender and borrower. The agreement modifies the original loan's maturity date and may adjust other terms while maintaining the fundamental lending relationship. It incorporates UAE Central Bank regulations and commercial banking practices, potentially including Sharia-compliant structures where applicable. The document addresses crucial elements such as revised repayment schedules, interest or profit rates, security continuation, and compliance with UAE banking regulations.

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Loan Extension Agreement

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What is a Loan Extension Agreement?

The Loan Extension Agreement is a critical document used in the UAE banking sector when parties need to extend the term of an existing loan facility. This document becomes necessary when a borrower requires additional time to repay the loan beyond the original maturity date, but where the fundamental lending relationship remains sound. It must comply with UAE Federal Laws, including the UAE Civil Code and Commercial Transactions Law, as well as UAE Central Bank regulations. The agreement typically includes provisions for the extended term, revised payment schedule, applicable interest or profit rates (considering both conventional and Islamic banking requirements), confirmation of existing security arrangements, and any new conditions imposed for the extension period. This document is particularly relevant in scenarios where refinancing isn't necessary but additional time for repayment would benefit both parties.

What sections should be included in a Loan Extension Agreement?

1. Parties: Identification of the Lender and Borrower with full legal names and addresses

2. Background: Recitals describing the original loan agreement, reason for extension, and current status of the loan

3. Definitions: Key terms used in the agreement, including references to defined terms from original loan agreement

4. Extension of Loan Term: Clear statement of the new maturity date and terms of the extension

5. Repayment Terms: Modified repayment schedule, including payment amounts, dates, and method of payment

6. Interest Rate: Specification of applicable interest rate during extended period, ensuring compliance with UAE banking regulations

7. Conditions Precedent: Conditions that must be satisfied before the extension becomes effective

8. Representations and Warranties: Updated confirmations from the Borrower about their financial status and ability to repay

9. Security Continuation: Confirmation that existing security remains in force for extended period

10. Costs and Expenses: Allocation of costs related to the extension agreement

11. Governing Law and Jurisdiction: Confirmation of UAE law governance and jurisdiction for disputes

What sections are optional to include in a Loan Extension Agreement?

1. Additional Security: Include if new security is being provided for the extended loan period

2. Guarantor Confirmation: Required if the original loan has guarantors who need to confirm their continued support

3. Islamic Finance Provisions: Include if the loan needs to maintain Sharia compliance

4. Fee Structure: Include if there are new or modified fees associated with the extension

5. Enhanced Reporting Requirements: Include if additional reporting requirements are being imposed as part of the extension

6. Default Interest: Include if specific default interest rates apply during the extension period

7. Cross-Default Provisions: Include if there are other facilities that need to be linked to this extension

What schedules should be included in a Loan Extension Agreement?

1. Schedule 1 - Original Loan Agreement: Copy or summary of the original loan agreement being extended

2. Schedule 2 - New Repayment Schedule: Detailed schedule of payments during the extended term

3. Schedule 3 - Conditions Precedent Documents: List of documents required to be delivered before extension becomes effective

4. Schedule 4 - Form of Extension Notice: Template for formal notification of extension activation

5. Schedule 5 - Security Documents: List and copies of continuing security documents

6. Appendix A - Calculation of Interest: Detailed breakdown of interest calculation methodology for extended period

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions




























Clauses




















Relevant Industries

Banking & Financial Services

Islamic Banking

Corporate Lending

Real Estate & Construction

Commercial Trading

Manufacturing & Industrial

Retail & Consumer Services

Healthcare

Education

Hospitality & Tourism

Technology & Communications

Energy & Utilities

Relevant Teams

Legal

Finance

Treasury

Compliance

Credit Risk

Corporate Banking

Islamic Banking

Loan Operations

Risk Management

Corporate Advisory

Documentation

Regulatory Affairs

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager

Loan Officer

Islamic Banking Specialist

Corporate Banking Manager

Financial Controller

Senior Credit Analyst

Banking Operations Manager

Debt Restructuring Specialist

Legal Director

Company Secretary

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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