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The Loan Agreement With Guarantor is a crucial financial instrument in Pakistani banking and commerce, designed to facilitate secured lending while minimizing risk for lenders. This document is typically used when a borrower requires additional security to obtain a loan, and a third party (guarantor) agrees to assume responsibility for the debt if the borrower defaults. The agreement must comply with Pakistani financial regulations, including the Contract Act 1872, Financial Institutions (Recovery of Finances) Ordinance 2001, and where applicable, Islamic banking principles. It's particularly relevant in scenarios where borrowers may have limited credit history or require larger loan amounts, with the guarantor's commitment providing additional assurance to the lender. The document includes comprehensive details about loan terms, guarantor obligations, enforcement mechanisms, and specific provisions required under Pakistani law.

1. Parties: Identifies and defines the Lender, Borrower, and Guarantor with their full legal names and addresses

2. Background: Contextual information explaining the purpose of the loan and the role of the guarantor

3. Definitions: Defines key terms used throughout the agreement

4. Loan Amount and Purpose: Specifies the principal amount, currency, and permitted use of the loan funds

5. Interest and Fees: Details the interest rate, calculation method, and any applicable fees

6. Drawdown: Conditions and procedure for disbursement of the loan

7. Repayment Terms: Schedule of repayments, payment methods, and prepayment provisions

8. Guarantee Provisions: Terms of the guarantee, including scope, limitations, and enforcement

9. Representations and Warranties: Statements of fact and assurances from both Borrower and Guarantor

10. Covenants: Ongoing obligations of the Borrower and Guarantor

11. Events of Default: Circumstances constituting default and consequences

12. Security: Details of any security or collateral provided

13. Indemnification: Provisions for indemnifying the Lender against losses

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Confirms Pakistani law as governing law and specifies jurisdiction for disputes

16. Miscellaneous: Standard boilerplate provisions including severability, amendments, and assignment