Secured Personal Loan Agreement Template

Secured Personal Loan Agreement Template

This Secured Personal Loan Agreement (“Agreement”) is made as of [Date of Agreement].

1. Parties

Lender:
Full Legal Name: [Lender Full Legal Name]
Address: [Lender Street Address, City, State/Province, ZIP/Postal Code, Country]
Phone: [Lender Phone Number]
Email: [Lender Email Address]

Borrower:
Full Legal Name: [Borrower Full Legal Name]
Address: [Borrower Street Address, City, State/Province, ZIP/Postal Code, Country]
Phone: [Borrower Phone Number]
Email: [Borrower Email Address]

2. Loan Details

Loan Amount: [Loan Amount in figures] ([Loan Amount in words])

Purpose of Loan: [Purpose of Loan]

The parties agree that this is a secured personal loan. The Borrower pledges specific collateral as described in Section 3 to secure repayment of the loan.

3. Collateral and Secured Nature of Loan

3.1 Collateral Description

To secure all amounts owed under this Agreement, the Borrower grants the Lender a security interest in the following property (“Collateral”):

Description of Collateral: [Description of Collateral]
Identification Details (if applicable): [Serial/VIN/Account or Other Identifiers]
Location of Collateral: [Address or Location of Collateral]

3.2 Ownership

The Borrower confirms that the Borrower is the lawful owner of the Collateral or has full authority to pledge it as security and that the Collateral is not already pledged to another lender, except as disclosed here: [Existing Liens or “None”].

3.3 Secured Nature

This Agreement is intended to create a valid security interest in the Collateral in favor of the Lender to the extent allowed by applicable law. The parties understand that additional documents may be needed to perfect or record the security interest if required by local law.

4. Disbursement of Loan

Disbursement Date: [Disbursement Date]

Method of Disbursement: [Bank Transfer / Check / Other Method]

Recipient Account or Payee Details: [Borrower Account or Payee Details]

The Borrower acknowledges receipt of the Loan Amount (or agrees to acknowledge receipt when disbursed) and agrees to repay the loan according to this Agreement.

5. Interest

Interest Rate: [Annual Interest Rate %] per year

Interest Calculation Method: [Simple Interest or Other Basis]

Interest Start Date: [Interest Start Date]

Interest will accrue on the unpaid principal balance from the Interest Start Date until the loan is repaid in full, unless otherwise stated here: [Additional Interest Terms or “None”].

If the parties agree that no interest will be charged, insert: Interest Rate: 0% (no interest will be charged on the loan).

6. Repayment Terms

Select one repayment structure and complete the details.

6.1 Installment Payments

Number of Installments: [Number of Installments]
Installment Amount: [Installment Amount]
Payment Frequency: [Monthly / Quarterly / Other]
First Payment Due Date: [First Payment Date]
Subsequent Payments: [Description of Due Dates]

OR

6.2 Single Lump-Sum Payment

Total Amount Due at Maturity (principal plus interest, if any): [Total Amount Due]
Maturity Date (Final Due Date): [Maturity Date]

OR

6.3 Custom Schedule

Repayment Schedule: [Description of Repayment Schedule or Reference to Separate Schedule]

Unless otherwise agreed in writing, each payment will be applied first to any accrued but unpaid interest and then to principal.

7. Method of Payment

Currency: [Loan Currency]

Payment Method: [Bank Transfer / Check / Other Method]

Payment Details:
Payee / Account Name: [Lender Payee or Account Name]
Bank / Institution: [Bank or Institution Name]
Account Number / IBAN: [Account Number or IBAN]
Payment Reference: [Suggested Payment Reference]

8. Early Repayment (Prepayment)

The Borrower may prepay the loan, in whole or in part, before the scheduled due dates without penalty, unless stated otherwise here: [Prepayment Terms or “No prepayment penalty”].

Any prepayment will first be applied to accrued interest (if any) and then to principal, unless the parties agree otherwise in writing.

9. Borrower Covenants Regarding Collateral

While any amount remains owed under this Agreement, the Borrower agrees to:

• Keep the Collateral in reasonably good condition, subject to normal wear and tear.

• Not sell, transfer, lease, or otherwise dispose of the Collateral without the Lender’s prior written consent, unless the loan is paid in full at or before the time of such transaction.

• Not create any additional security interest or lien on the Collateral in favor of another party, except as the Lender may agree in writing.

• Maintain any required registration, title, or documentation for the Collateral in the Borrower’s name or as otherwise permitted by law.

• Promptly notify the Lender of any loss, theft, damage, seizure, or material change affecting the Collateral.

10. Insurance and Risk

If the Collateral is of a type commonly insured (such as a vehicle or valuable equipment), the Borrower agrees to:

• Maintain reasonable insurance coverage for the Collateral, if available, in an amount customary for similar property.

• Name the Lender as a loss payee or additional interest if required by the Lender and permitted by law.

• Use any insurance proceeds relating to damage to the Collateral to either repair the Collateral or reduce the outstanding loan balance, as agreed between the parties and consistent with applicable law.

The Borrower remains responsible for the loan even if the Collateral is damaged or destroyed, unless the parties agree otherwise in writing.

11. Late Payment and Default

11.1 Late Payment

A payment is considered late if it is not received within [Number] calendar days after its due date.

Late Fee (if any): [Late Fee Amount or Percentage, or “No late fee”].

11.2 Events of Default

The Borrower will be in default under this Agreement if any of the following occur:

• Failure to pay any amount due under this Agreement within [Number] days after written notice of non-payment.

• Material breach of any other term of this Agreement (including covenants relating to the Collateral) that is not corrected within [Number] days after written notice.

• The Borrower becomes subject to insolvency, bankruptcy, or similar proceedings, where applicable law treats such events as default.

11.3 Remedies on Default

Subject to applicable law and any required notices or cure periods, if a default occurs, the Lender may:

• Declare the entire remaining principal balance, plus any accrued interest and permitted fees, immediately due and payable.

• Exercise rights in the Collateral allowed by law, which may include taking possession of the Collateral or arranging for its lawful sale, after giving any required notices.

• Apply any net proceeds from the sale of the Collateral to the outstanding debt. Any remaining balance after applying proceeds remains the Borrower’s responsibility, unless prohibited by law.

The Lender will follow all applicable legal procedures when enforcing rights against the Collateral.

12. Representations and Warranties

Each party represents and warrants that:

• They have the legal capacity and authority to enter into this Agreement.

• They have read and understand the terms of this Agreement.

• They are entering into this Agreement voluntarily.

The Borrower further represents that:

• The information provided about the Collateral is accurate.

• The Borrower has the right to grant a security interest in the Collateral to the Lender.

13. Tax and Legal Considerations

Each party is responsible for their own tax, accounting, and legal obligations related to this loan and any interest received or paid.

The parties may seek advice from qualified professionals if they have questions about tax treatment, reporting, or legal requirements in their jurisdiction.

14. Amendments and Waivers

Any amendment to this Agreement must be in writing and signed by both the Lender and the Borrower.

If either party does not enforce a right under this Agreement at a particular time, that does not mean the right is waived for the future.

15. Notices

All notices under this Agreement must be in writing and sent to the addresses or email addresses listed in Section 1, unless a party provides updated contact details in writing.

Permitted methods for notice include:

• Personal delivery;

• Mail or courier;

• Email, if both parties agree to receive notices electronically.

16. Governing Law

This Agreement is governed by the laws of [State/Province, Country], unless the parties specify a different governing law here: [Alternative Governing Law, if any].

17. Entire Agreement

This Agreement contains the entire understanding between the parties regarding this secured personal loan and the Collateral and replaces any prior oral or written discussions or agreements about this specific loan.

Signatures

By signing below, the Lender and Borrower agree to be bound by the terms of this Secured Personal Loan Agreement.

Lender:
Signature: _______________________________
Printed Name: [Lender Full Legal Name]
Date: [Date]

Borrower:
Signature: _______________________________
Printed Name: [Borrower Full Legal Name]
Date: [Date]

Witnesses (Optional, if used)

Witness 1:
Signature: _______________________________
Printed Name: [Witness 1 Full Name]
Address: [Witness 1 Address]
Date: [Date]

Witness 2 (if required):
Signature: _______________________________
Printed Name: [Witness 2 Full Name]
Address: [Witness 2 Address]
Date: [Date]

Notary Acknowledgment (Optional, if required)

State/Province of [State/Province]
County of [County]

On [Date], before me, [Notary Full Name], a Notary Public, personally appeared [Lender Full Legal Name] and [Borrower Full Legal Name], who proved their identities on the basis of satisfactory evidence and acknowledged that they executed this Secured Personal Loan Agreement for the purposes stated in it.

Notary Public Signature: _______________________________
Notary Public Printed Name: [Notary Full Name]
My Commission Expires: [Date]
Notary Seal: ☐