Which document sets the legal terms of the loan agreement?

• A. Product disclosure statements.
• B. Loan contract.
• C. Privacy notices.
• D. Credit guide.

Answer: (B)

The loan contract is where the binding, legal terms of the loan are set. It is the formal written agreement between borrower and lender that specifies what is borrowed, how interest is calculated, the repayment timetable, any fees, conditions attached to the loan, and the rights and remedies available if terms are not met. Because it creates enforceable obligations for both sides, it’s the document that governs the actual loan arrangement.

Other documents serve supporting roles. A product disclosure statement explains features, costs, and risks so you can compare products, but it doesn’t bind you to the exact terms of the loan. Privacy notices describe how your personal information will be handled, and a credit guide offers information about your rights and the lending process. Neither of these sets the legal terms of the loan.