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Loan Agreement Fill out the template
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Loan Agreement

Rating: 4.8 - 478 votes
Last revision
Last revision 06/13/2018
Formats
Formats Word and PDF
Price
Price FREE
Size
Size 3 to 4 pages
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About the template

Last revision: 06/13/2018

Size: 3 to 4 pages

Available formats: Word and PDF

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Loan Agreement

A Loan Agreement is a written promise from a lender to loan money to someone in exchange for the borrower's promise to repay the money lent as described by the Agreement. Its primary function is to serve as written evidence of the amount of a debt and the terms under which it will be repaid, including the rate of interest (if any). The note serves as a legal document that is enforceable in court creating obligations on the parts of both the borrower and the lender. Use this Loan Agreement template to lend or borrow money.

Though Loan Agreements are often referred to as IOUs or Promissory Notes, Loan Agreements are different than these documents in two key respects: 1. Loan Agreements are binding on both the borrower and the lender; and 2. Loan Agreements are much more detailed and include extensive provisions about when and how the borrower will repay the loan and what sorts of penalties will be incurred if the borrower does not follow through with repayment. Loan Agreements are usually used when large sums of money are involved, such as student loans, mortgages, car loans, and business loans. For smaller and/or more informal loans, such as those between family and friends, a Promissory Note, also available on this website, should be used.


How to Use this Document

This Agreement sets out all of the terms and details of the loan, including the names and addresses of the borrower and lender, the amount of money being borrowed, how often payments will be made, the amount of the payments, and the signatures of the parties.

You can choose from several types of loans accessible within this form.

  • Installment Loan. The borrower pays off the loan, plus interest (if any), by making payments over a set period of time, such as annually, monthly, or weekly.
  • Lump Sum Payment. The borrower pays off the money borrowed, plus interest (if any), in one single payment due on a pre-agreed upon date
  • Due on Demand. The borrower pays off the money borrowed, plus interest (if any), in a single payment due at the time the Lender requests it.

You can also specify whether or not interest will accrue on the loan and, if so, the interest rate that will be used. You also have the option of including provisions to govern early payments as well as an acceleration clause that would cause the entirety of the loan to come due in the event of late payments or non-payment according to the agreed upon payment plan schedule.

If the lender and the borrower decide to change the terms of the Loan Agreement, use an Amendment to Agreement form. Once the loan has been fully repaid, complete a Release of Loan Agreement form.

 

Applicable Law

Loan Agreements are governed by Article III of the Uniform Commercial Code (the "UCC").

There are a number of essential elements that must be present in order for your Loan Agreement to be enforceable in a court of law.

  • A Loan Agreement must be in writing so that a court can refer to the written record.
  • The Agreement must be a promise to pay money.
  • The Agreement must indicate a specific amount of money that will be paid. This does not apply to any interest that may be required. If an Agreement specifies an interest rate but does not include a dollar amount, it is still valid.
  • The borrower and lender must both sign the Agreement


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