The lender will then give you an advance and your next paycheck will pay the loan plus a large portion of the interest. A loan agreement consists of the following: FHA Loans – It is difficult to acquire a loan to buy a home if your creditworthiness is less than 580. Therefore, you need a credit agreement to take out insurance in case of delay in the loan or mortgage. In short, a credit agreement is a formal legally binding document that constitutes both positive and negative agreements between the borrower and the lender, in order to protect both parties if one of the parties does not respect its commitments. Not all loans are structured in the same way, some lenders prefer weekly, monthly or any other type of preferential schedule.