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In this tutorial, the host explains how to write a payment agreement, a legally binding document between a lender and borrower outlining loan terms, including the amount, payment schedule, and penalties. First, it’s important to draft the opening agreement, where the signer acknowledges financial responsibility for all services and agrees to pay the specified amount within a certain timeframe. Next, the agreement should include a penalty statement for late payments, noting that each agreement can have different penalties, allowing for adjustments to percentages and amounts as needed. The video emphasizes using a template to streamline the process.