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In this tutorial, we learn how to write a payment agreement, a legally binding document between a lender and a borrower outlining loan terms, payment schedule, and penalties. The first step is to draft the opening agreement, declaring the signer understands and accepts financial responsibility for the payments. An example phrase is: "I understand and agree that I am financially responsible for payment of all services." Next, include a statement regarding penalties for late payments, where specifics such as percentage and amounts can be adjusted according to the agreement's terms.