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Personal Loan Agreement Template – Washington
Define clear loan terms and repayment obligations in Washington with this Personal Loan Agreement Template.
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Personal Loan Agreement
This Personal Loan Agreement ("Agreement") is made and entered into on [Date], by and between:
Lender: [Full Name / Company Name]
Address: [Lender’s Address]
and
Borrower: [Full Name / Company Name]
Address: [Borrower’s Address]
Together referred to as the "Parties."
1. Principal; Purpose Reference
Borrower receives a principal sum of $[Loan Amount]. Intended purpose: [Purpose], which is informational unless restricted. No third‑party fees unless specified in this Agreement.
2. Funding; Confirmation
Disbursement will occur on/before [Date] via [Method]; Borrower provides account details in writing. Lender will retain proof of transfer; Borrower will acknowledge receipt in writing. Transfer charges are allocated to ☐ Lender ☐ Borrower.
3. Interest Election
☐ Interest at [X]% per annum on outstanding principal, accruing from funding. ☐ Interest‑free — no interest will be charged or collected. If required, attach an amortization schedule as Exhibit A.
4. Repayment Terms and Application
Installments of $[Amount] due ☐ Weekly ☐ Monthly from [Start Date] until [Maturity Date]. Payments apply to fees (if any), interest (if any), then principal unless stated otherwise. Prepayment is ☐ penalty‑free ☐ subject to [X]% fee.
5. Late Fees; Returned Items
Late fee $[Late Fee] after [X] days; returned payment fee $[Return Fee]. Repeated lateness may trigger default and acceleration per Section 7. Borrower should alert Lender promptly if issues arise.
6. Collateral (Optional)
☐ Secured by [Collateral] — Borrower grants a security interest and will execute filings as needed. ☐ Unsecured — no collateral. Collateral must be owned free of undisclosed liens.
7. Default; Acceleration; Remedies
Default includes nonpayment, insolvency, misrepresentation, or breach of covenants. Upon default, Lender may accelerate and pursue lawful remedies; Borrower remains liable for permitted costs. Parties agree to consider reasonable cure efforts prior to litigation when feasible.
8. Mutual Statements and Assurances
Both Parties confirm authority and accuracy of information provided. Funds will be used for lawful purposes; each Party obtains their own legal/tax advice. No reliance is placed on any statement not included in this Agreement.
9. Notices; Records; Address Updates
Formal notices via certified mail or courier; email copies may be sent for convenience. Maintain records of notices and payments for [X] years. Address changes must be provided within [X] days.
10. Governing Law; Venue; ADR Option
This Agreement is governed by [State/Country]; venue lies in [County/City], [State]. Mediation/arbitration may be elected by written addendum. Severability and non‑waiver clauses apply.
11. Entire Agreement; Amendments; Survival
This Agreement constitutes the entire understanding between the Parties. Modifications require written signatures of both Parties. Obligations that by their nature survive termination shall do so.
IN WITNESS WHEREOF, the Parties have executed this Personal Loan Agreement as of the date first written above.
Lender Signature
Name: __________________________
Date: __________________________
Borrower Signature
Name: __________________________
Date: __________________________
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Personal Loan Agreement Template – Washington
Washington Personal Loan Agreement FAQ
What is a Personal Loan Agreement?
A Personal Loan Agreement is a legally binding contract between a lender and a borrower that outlines the key terms of a loan, including the loan amount, interest rate, repayment schedule, and any applicable fees or penalties. The agreement protects both parties by clearly defining their rights and obligations, helping to prevent future disputes or misunderstandings.
Essentially, it sets out all the important details of how the loan will be repaid and under what conditions. Reviewing the terms carefully before signing — especially the interest rate, repayment timeline, and any late payment clauses — can help you avoid unexpected costs or issues later.
When to use a Personal Loan Agreement?
A Personal Loan Agreement should be used whenever money is being lent between two parties — whether between friends, family members, or through a business or financial institution. It’s especially important when the loan involves a significant amount of money, has repayment terms over time, or includes interest or collateral.
The agreement helps prevent misunderstandings by clearly outlining how much is being borrowed, when it must be repaid, and under what conditions. It’s also useful as legal proof of the debt, protecting both the lender and the borrower if any disputes arise later.
What should be included in a Personal Loan Agreement?
A Personal Loan Agreement should clearly outline all the terms and conditions of the loan to protect both the borrower and the lender. While simple loans may only require a promissory note, more detailed agreements should include the following key elements:
Identifications: Full names and addresses of the lender and borrower.
Effective dates: The start date of the agreement and any other important deadlines.
Loan amount: The total sum being borrowed (the principal).
Collateral: If the loan is secured, specify the asset pledged as security.
Interest rate: The cost of borrowing, whether fixed or variable. Any fees or additional costs should be stated, often reflected as an APR (Annual Percentage Rate).
Repayment schedule: How and when payments will be made — including frequency and duration.
Penalties: Details of late payment fees or consequences of default.
Jurisdiction: The state or area whose laws will govern the agreement.
Severability clause: Ensures that if one part of the contract is invalid, the rest remains enforceable.
Entire agreement clause: States that the written contract represents the full understanding between both parties.
Signatures: Both parties must sign and date the agreement for it to be legally binding.
Having these sections clearly written helps prevent confusion and ensures that both sides understand their rights and responsibilities from the start.
Can a Personal Loan Agreement be changed after signing?
Yes, a Personal Loan Agreement can be changed after signing, but only if both the lender and the borrower agree to the modifications. Any changes — such as adjustments to the repayment schedule, interest rate, or loan amount — must be made in writing through an official amendment or addendum to the original agreement.
Both parties should sign and date the amendment for it to become legally valid. Verbal changes or informal agreements are not enforceable and can lead to misunderstandings or legal disputes. Keeping all modifications clearly documented helps ensure transparency, protects both parties, and maintains the integrity of the original contract.
What’s the best way to prove a loan was repaid under a Personal Loan Agreement?
The best way to prove that a loan was repaid under a Personal Loan Agreement is to maintain clear, written evidence of every payment made. This includes bank transfer records, receipts, or signed payment acknowledgments from the lender. If payments were made in cash, both parties should sign a short receipt confirming the amount and date.
It’s also helpful to keep the full repayment schedule and a final statement marked “paid in full” once the loan is settled. These records serve as proof that all obligations under the agreement were met and protect both sides from future disputes.
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