Loan Agreement Template
Looking for a Loan Agreement template? Our team has drafted a simple, easy to understand, and easy to customize Loan Agreement template. Download the contract ( in Word or PDF) and save your precious time in business.
Free Loan Agreement Template Samples
What is a Loan Agreement?
A loan agreement is a very complicated document capable of protecting the two parties. The lender generates the loan agreement in most cases, which means the lending party has the burden of including all terms and conditions for the agreement.
If you have not previously concluded loan agreements, you will probably want to ensure that you understand all parts of the loan fully so that you do not leave anything out which can protect you during the loan lifetime.
Depending on the purpose of the loan and the amount of money being borrowed, loan agreements can range from relatively simple letters that provide basic details about how long a borrower has to repay the loan and what interest will be charged, to more elaborate documents, such as mortgage agreements.
What is a personal loan agreement?
As a legally binding contract, a personal loan agreement can be concluded with an official lender, such as a bank or a credit union, or with a friend who lends money to you in an informal setting. Basically, it states that:
- How much you’re borrowing
- When you promise to pay it back
- Any fees and/or penalties you’ve agreed to pay, depending on the situation
If you default on the loan, a lender may take action in court to get its money back via wage garnishment or another method.
You must place collateral such as your car or home in order to guarantee the loan if you execute a secure personal loan agreement. You might lose your collateral to the lender if you do not return the loan. In your agreement, make sure you review this section.
It is a good idea to draw up an official agreement to avoid any misunderstanding that could have an impact on your relationship when lending money to close friends or family members. While it may appear overwhelming for small amounts that can be paid by the next paycheck, you may consider making documents on larger personal loans that take longer to repay.
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Can I write my own loan agreement?
Frequently Asked Questions
FAQs about our Loan Agreement Templates
We recognize that your contract layout conditions may need to be changed to be in line together with your client’s needs. That’s why we have made Contract in Word format as well so that you’ll be able make adjustments as you like. If you want to make important changes to the template, we propose you to get help of a lawyer or conveyancer to make sure you still have protection.
There is no such requirement for a witness or notary public to witness the signing of the Loan Agreement.
However, depending on the nature of the loan and the governing law of the jurisdiction in which you’re entering into the loan, you may be required to have witnesses or a notary public witness the Loan Agreement.
Even if it is not required, having an objective third party witness the signing of the loan agreement will be better evidence when you need to enforce the repayment of the loan. Signing the note in front of a notary public is the best evidence that the Borrower signed the loan agreement.