Loan Agreement Template

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Updated Apr 18, 2025
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A loan agreement is a contract between a lender and a borrower that must be followed by both parties. It carefully spells out important details like how much money is taken, when it must be paid back, the interest rate, and what will happen if the payments aren't made on time. On Loio, you can make a loan contract template, change it to fit your needs, and then use it again.
LOAN AGREEMENT

This Loan Agreement (the "Agreement") is entered into on   (the "Effective Date") by and between

 , an individual having their usual place of living at   (the "Lender"), and

 , an individual having their usual place of living at   (the "Borrower"), collectively referred to as the "Parties" and individually as the "Party".

WHEREAS the Parties have engaged in discussions and negotiations to reach a mutually acceptable agreement and desire to establish the rights, obligations, and responsibilities of each Party regarding the loan;

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, and upon other good and valuable considerations, the receipt and sufficiency of which is hereby acknowledged, the Parties have agreed as follows:

SUBJECT OF THE AGREEMENT. The Lender provides a loan to the Borrower in the amount of   (the "Principal Amount")

INTEREST RATE. The loan shall accrue interest at the rate of  % per month (the "Interest Rate" or "Accrued Interest"). This Interest Rate shall be applied to the Principal Amount. The total Accrued Interest on the Principal Amount shall not exceed the maximum amount allowed by law, and the Borrower shall not be obligated to pay any interest exceeding this limit. 

REPAYMENT TERMS AND PROCEDURE. The entire Principal Amount with the Accrued Interest shall be due and payable on   (the "Maturity Date").

Early repayment. The Borrower reserves the right to prepay the Principal Amount, in full or in part, at any time with a penalty of  % on the Principal Amount to be repaid.

Late payments. If the Borrower fails to make payments by the Maturity Date, the Borrower shall be liable for a late fee of  % of the overdue payment amount. 

All payments shall be made in cash.

SECURITY. As part of this Agreement, the Borrower agrees to secure this Agreement by pledging the following security:   (the "Security").
The Borrower shall undertake all essential measures to appropriately perfect and record the Lender's security interest in the Security in compliance with relevant laws. The Borrower shall execute any documents, including financing statements or other instruments, as required by the Lender to perfect and maintain the Borrower's security interest.

In the event of a default, the Lender shall be entitled to all remedies provided by law, including but not limited to the right to take possession of, sell, or otherwise dispose of the Security to fulfill the outstanding obligations.

COVENANTS. The Borrower agrees to the following covenants and obligations applicable during the term of this Agreement:

DEFAULT. Any of the following events shall constitute a default under this Agreement:

  • The Borrower fails to make any payment due under the terms of this Agreement.
  • The Borrower becomes insolvent, files for bankruptcy, makes an assignment for the benefit of creditors or becomes subject to any similar insolvency proceedings.
  • The sale of a material portion of the Borrower's assets.
  • Death of the Borrower.

In the event of default, the Lender shall have the following remedies:

  • The Lender may demand the entire outstanding Principal Amount, along with the Accrued Interest, to be immediately paid.
  • The Lender may initiate collection efforts, including engaging collection agencies or pursuing legal action, to recover the outstanding Principal Amount and the Accrued Interest owed under this Agreement.

FORCE MAJEURE. Neither Party shall be liable for any failure to perform or delay in performing the obligations under this Agreement if such failure or delay is caused by events of force majeure, including but not limited to acts of God, war, terrorism, strikes, lockouts, labor disputes, pandemics, epidemics, governmental regulations, or any other similar causes beyond the reasonable control of the affected Party. 

In the case of force majeure, the affected Party shall immediately notify the other Party in writing and provide reasonable proof of the cause of the delay or inability to perform the obligations. The Party affected by force majeure shall endeavor to mitigate the consequences of such circumstances and resume the performance of obligations as soon as possible after the circumstances cease to exist. 

If the force majeure circumstances last more than   days, either Party may terminate this Agreement by giving written notice to the other Party. In this case, neither Party shall be liable to the other Party for any damages arising from the termination of this Agreement.

 

CONFIDENTIALITY. The Parties agree to keep all disclosed information, including but not limited to sensitive information, confidential and not share such information with any third party unless required by law. To fulfill the Parties' obligations under this Agreement, they agree not to use the confidential information for any purpose unrelated to this Agreement. This confidentiality clause shall remain in effect after the termination or expiration of this Agreement. 

TERM AND TERMINATION. This Agreement shall commence on the Effective Date and shall continue until the Maturity Date unless terminated earlier under the terms of this Agreement. 

Either Party may terminate this Agreement immediately upon written notice to the other Party if the other Party becomes insolvent or files for bankruptcy. 

NOTICE. Any notice or communication required to be given under this Agreement shall be deemed duly given if delivered personally or sent by registered mail, return receipt requested to the address specified in the opening paragraph or to such other address as one Party may have furnished to the other Party in writing, or to emails set forth below:

If to the Lender:   

If to the Borrower:  

The Parties may change their registered mail or email addresses for receipt of notices by giving written notice to the other Party. 

GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be governed by and interpreted under the laws of the State of  , and any disputes resulting from or related to this Agreement shall be exclusively resolved by the courts of the State of  .

 

SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

 

ASSIGNMENT. Neither Party may assign or transfer this Agreement without the prior written consent of the other Party, which approval shall not be unreasonably withheld.

ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between the Parties and supersedes any prior oral or written agreements.

WAIVER. The failure of any Party to enforce a particular provision of this Agreement shall not constitute a waiver of their right to enforce that provision in the future.

 

AMENDMENTS. This Agreement may be amended or modified only by a written agreement signed by both Parties. Any amendments to this Agreement shall be binding only if they are in writing and signed by both Parties.

BINDING EFFECT. This Agreement shall be binding upon the Parties and their respective successors and assigns.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

THE LENDER

THE BORROWER

 ,

 , USA

  

 

 

 

____________________________________

(Place for signature)

 

 

 ,

 , USA

  

 

 

 

_____________________________________

(Place for signature)

 

  

Written by Karyna Pukaniuk - Reviewed by Kateryna Adkham

Template Types

Payment (Plan) Agreement
This document outlines the schedule for payments to be made to fulfill a debt.
Family Loan Agreement
This agreement documents the amount borrowed and repayment terms between the parties.
Loan Personal Guarantee Form
This form represents the guarantor's promise, pledging their assurance to satisfy a debt.
Shareholder Loan Agreement
This contract details the specifics of a loan between a company and a shareholder.
Personal Loan Agreement
This form is necessary whenever a loan is given from one individual to another.

Template Description

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Paper titled "Loan Agreement"; man shaking his hand with a woman holding a big coin; coins and bank notes lying on the right

When To Use a Loan Contract

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You can use a loan agreement template when:

  • Lending money to a friend or family member — to avoid confusion and keep the agreement clear.
  • Borrowing money from someone you know — to show you're serious about paying it back.
  • Giving or getting a loan for a business — to outline terms like interest and payment schedule.
  • Buying something expensive with a payment plan — like a car, equipment, or electronics.
  • Charging interest on a personal loan — to make it legally binding and fair.
  • Protecting yourself legally — in case of missed payments or disputes.

How To Fill Out a Loan Agreement Contract

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1. Fill in the names and addresses

contract for loaning money

Start with entering the names of both parties (the one giving the loan and the one receiving it) along with their addresses.

Example:

This Loan Agreement (the "Agreement") is entered into on April 20, 2025 (the "Effective Date") by and between David Morgan, an individual having their usual place of living at 123 Oak Street, Denver, CO (the "Lender"), and Emily Turner, an individual having their usual place of living at 456 Pine Avenue, Boulder, CO (the "Borrower").

2. Specify the loan amount

contract for loaning money

Mention how much money is being loaned.

Example:

SUBJECT OF THE AGREEMENT. The Lender provides a loan to the Borrower in the amount of $10,000 (the "Principal Amount").

3. Set the interest rate

money loan contract

Write the agreed interest rate for the loan.

Example:

INTEREST RATE. The loan shall accrue interest at the rate of 1.5% per month (the "Interest Rate" or "Accrued Interest").

4. Add repayment terms

simple loan agreement template free

Note when the full amount is due and what happens with early or late payments.

Example:

REPAYMENT TERMS AND PROCEDURE. The entire Principal Amount with the Accrued Interest shall be due and payable on December 31, 2025 (the "Maturity Date").

Early repayment. The Borrower reserves the right to prepay the Principal Amount, in full or in part, at any time with a penalty of 0%.

Late payments. If the Borrower fails to make payments by the Maturity Date, a late fee of 2% of the overdue payment applies.

5. Add a clause for special situations

free loan agreement template

If unexpected events make it impossible to continue the basic loan agreement, set how many days it takes before either side can cancel.

Example:

If the force majeure circumstances last more than 30 days, either Party may terminate this Agreement by giving written notice.

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