What is a Loan Agreement?

A Loan Agreement is a contract that sets out the terms on which money is lent and repaid. It protects both the lender and the borrower by putting the amount, interest, repayment schedule and consequences of default in writing — whether the loan is between a business and a bank, two companies, or family and friends.

Why put a loan in writing?

Verbal loans are the fastest way to lose both your money and a relationship. A written agreement removes doubt about what was agreed and gives the lender a clear route to recover the money if the borrower defaults.

What to include

  • Parties — lender and borrower.
  • Loan amount and how it is paid out.
  • Interest rate (if any) and how it is calculated.
  • Repayment schedule and final repayment date.
  • Security / collateral and any guarantor.
  • Default and remedies.

Create your Loan Agreement

Complete a short form and download your agreement. For added protection, pair it with a Personal Guarantee.

FAQ

Should a loan between friends be written down?

Absolutely. A short written agreement protects the friendship as much as the money.