Loan Agreement

This document can be used to create a legally binding document that sets out the terms and conditions of a loan between individuals or companies. This document can be used to make a one-off loan to friends or family, or between businesses. The document may be used where the parties are based in England and Wales.

For a less formal agreement for the lending of money, a promissory note may by used (this document is often used between family members or friends, as an IOU).

This document can be tailored to reflect a simple loan that is repayable on demand, or for a fixed term loan where payments are made by instalment, as well as to include further options such as guarantors and/or security for the loan.

How should this document be used

This document should be carefully read by all parties. Once the contents has been agreed, the parties should sign it before the loan is transferred.

The lender, borrower (and any guarantor) should hold a copy which has the signature of all the parties on it. See our legal guide for further details about the signing of legal contracts. This guide includes information about how documents should be signed by a company.

The money to be loaned should then be advanced on the date set out in the agreement and repayment will commence in accordance with the terms of the agreement.

If any party wishes to amend the agreement in the future, all parties should agree to do so, and that agreement, and the amendments should be recorded properly in writing.

Any applicable law

Consumer Credit Act 1974

The Companies Act 2006 (for companies)

The general principles of contract law will apply to this agreement.

Help from a lawyer

You can choose to consult a lawyer if you need help.

The lawyer can answer your questions or help you through the process. You will be offered this option when you complete the document.

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.