Loan Agreement Template
Put a loan in writing with clear terms for the amount, interest, and repayment schedule.
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About Loan Agreement
A loan agreement is a contract between a lender and a borrower that sets out the amount borrowed, the interest rate, and the repayment terms. It creates a clear record of the debt and the obligations of both parties, which helps prevent misunderstandings.
A complete loan agreement covers the principal amount, the interest rate, the repayment schedule, any late fees, and what happens if the borrower defaults. It may also include collateral or a guarantor. Putting these terms in writing protects both the lender and the borrower.
This is a general template, not an official form or legal advice. Interest rates and lending terms are regulated and vary by state, so confirm the limits and disclosure rules that apply and consider legal review before you use it.
Who needs to complete it
- Individuals lending money to friends or family who want it in writing
- Small business owners borrowing or lending funds
- Lenders who need a clear record of the debt and repayment terms
- Borrowers who want the interest rate and schedule defined
How to fill out Loan Agreement
- 1Enter the names and addresses of the lender and the borrower.
- 2Set the date of the agreement.
- 3State the principal amount being loaned.
- 4State the interest rate and how interest is calculated.
- 5Set the repayment schedule, including due dates and amounts.
- 6Add terms for late fees and what counts as a default.
- 7Note any collateral or guarantor securing the loan.
- 8Have both parties sign and date the agreement.
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Frequently asked questions
What is the difference between a loan agreement and a promissory note?
A promissory note is usually a simpler, one sided promise by the borrower to repay. A loan agreement is a more detailed contract signed by both parties that covers interest, repayment, default, and other terms.
Do I have to charge interest on a loan?
You can make an interest free loan, but many lenders charge interest. Interest rates are regulated, and some states set maximum rates, so confirm the limits that apply before setting a rate.
What happens if the borrower does not repay?
The agreement should describe the consequences of default, such as late fees, acceleration of the balance, or the right to pursue collateral. Having these terms in writing supports the lender if repayment stops.
Can I rely on this loan agreement template?
This is a general template and not legal advice, and lending and interest laws vary by state, so confirm your local requirements and consider legal review before you rely on it.