Cheque Deposit Letter Pursuant To A Loan Agreement

Two copies of the letter can be printed and signed by the borrower, and one copy may be kept for registration, while the other is given to the lender. The lender`s signature can be obtained on the letter as confirmation of receipt of the letter and cheques. The letter can be sent in person to cheques delivered personally or by mail/mail. In the event that the borrower deposits these cheques with the lender, subject to the terms of the loan, a default upon repayment of the loan amount would allow the lender to deposit the cheques for the unpaid amounts and recover them. In the event of insufficient balance in the borrower`s account, the cheque is „bounced“ – that is, disgraced, giving the lender the right to act under Section 138 of the Negotiable Instruments Act, under which the dishonour of a cheque is a criminal offence. While the courts have had differing views on this issue and whether it is possible to act in accordance with Section 138 of the Negotiable Instruments Act, recent Supreme Court decisions seem to confirm this. This document can be used by a borrower who must hand out undated postal data cheques or cheques as collateral for a loan repayment to the lender. In this cheque deposit letter, all relevant information can be filled out, such as. B the name of the borrower and lender, the amount of the loan and the cheque numbers, as well as the amounts for which the cheques are submitted. The letter of deposit of cheques under a loan agreement is a document used to deliver undated cheques or cheques as a guarantee of repayment of the loan by a borrower. Lenders often require borrowers to give cheques as collateral, as a default gives the lender the right to deposit the cheques and get their money back. This is a faster way to recover the money borrowed and is therefore preferred by some lenders, including banks. Other names for the document: letter of cheques under a loan agreement, delivery of cheques to lenders, letter of deposit of cheques, letter for the deposit of the post of cheques dated to the lender, Post Dated Cheque Deposit Letter.