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Loan Agreement
Establish terms, interest, and repayment details for personal or business loans using this Loan Agreement.
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Loan Agreement
This Loan Agreement (“Agreement”) is entered into on [Date], by and between:
• Lender: [Full Name or Company Name], with an address at [Address].
• Borrower: [Full Name or Company Name], with an address at [Address].
Collectively, the “Parties.”
1. Loan Amount
The Lender agrees to lend to the Borrower the principal sum of $[Amount].
2. Interest Rate
The loan will bear interest at a rate of [Interest Rate]% per annum.
3. Payment Terms
The Borrower agrees to repay the loan as follows:
• ☐ Lump-sum payment: Principal and interest due by [Date].
• ☐ Installments: Payments of $[Amount] payable [monthly/weekly], beginning on [Start Date] and continuing until paid in full.
4. Late Payment
Payments not received within [Grace Period] days after the due date will incur a late fee of $[Amount] or [Percentage]% of the unpaid amount.
5. Prepayment
The Borrower may prepay the loan in whole or in part without penalty.
6. Default
If the Borrower defaults, the Lender may declare the entire outstanding balance immediately due, pursue legal action, and recover attorney fees and related costs.
7. Governing Law
This Agreement is governed by the laws of the State of [State]. Any disputes will be resolved in the courts of [County, State].
Signatures:
Lender: ______________________________ Date: ____________
Printed Name: ____________________________
Borrower: ____________________________ Date: ____________
Printed Name: ____________________________
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Easy-to-understand jargon
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Loan Agreement
Click below for detailed info on the template.
For quick answers, scroll below to see the FAQ.
Click below for detailed info on the template.
For quick answers, scroll below to see the FAQ.
LOAN AGREEMENT FAQ
What is a loan agreement?
A loan agreement is a legally binding contract that specifies the terms under which money is borrowed, including repayment schedule, interest rate, collateral (if applicable), and consequences of default. It serves as a clear record of the financial arrangement between lender and borrower.
Why do you need a loan agreement?
It ensures that both parties fully understand their rights and obligations, protects against misunderstandings, and provides legal recourse if terms are not met. A well-drafted loan agreement also helps maintain a professional and transparent lending relationship.
When should I use a loan agreement?
Use a loan agreement for any lending or borrowing arrangement—whether personal or commercial—especially when the amount is significant, repayment terms are detailed, or collateral is involved.
How to write a loan agreement?
Include the loan amount, repayment schedule, interest rate, late payment penalties, any collateral requirements, default provisions, and governing law. Make sure both parties sign the agreement to make it enforceable.
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