Free Loan Agreement Template

You can customize the terms of your document depending on the type. Consider specific provisions for business loans, payment plans, or personal loan agreements. View our library of loan agreement templates to find the one that meets your specific purpose.

Outlines terms for lending money to a business, including repayment, interest, and collateral

Business Loan

Establishes how a borrower will repay a debt in regular, scheduled payments

Payment Plan

Acknowledges a debt in writing, including the amount owed and repayment expectations

I Owe You

Legally documents a borrower's promise to repay a specific amount under agreed terms

Promissory Note

Formally forgives a borrower’s obligation to repay a loan or outstanding balance

Release of Debt

Provides legal security for a loan by placing property in trust until repayment

Deed of Trust

Grants a lender legal rights to property as collateral for a real estate loan

Mortgage Deed

It’s best practice to have a loan agreement every time you lend or borrow money. While the terms may vary for each type of loan, having a written agreement offers extra protection and clarity. Create a contract for various situations, including the following:

• Personal loans for vacations, weddings, or medical situations
• Financial emergencies
• Auto purchases
• Mortgage or home renovations
• Educational expenses

Your loan agreement’s language, format, and terms work to ensure fair and transparent conditions for everyone. Write an effective and binding contract with the following steps:

1. State the date: Provide the full date for the agreement. This sets the timeframe for the execution of the agreement’s terms.
2. Identify the lender: Clearly list the lender as an individual or a business entity. Provide the full legal name and address for this party.
3. Name the borrower: Identify who is receiving the loan. State the full name of the individual or entity and include their address.
4. Record the loan details: Record the exact loan amount, proposed repayment method, and applicable fees. Set the terms for due dates, late fees, and accepted payment formats.
5. Outline the loan terms: Set the terms for the loan, such as the interest rates, collateral, default terms, and prepayments. Check state usury laws for maximum rates or other limitations when setting the interest rate.
6. Set communication methods: Determine how the borrower and lender will communicate regarding payments, outstanding balances, or changes to the agreement. Typically, communication occurs through delivery services, registered mail, or email.
7. Add a guarantor: If the lender wants an additional level of security, they may ask the borrower to add a guarantor to the agreement. The guarantor’s full legal name and contact information should be included, as this individual will be held responsible if the borrower defaults on payments.
8. Determine conflict resolution: Set the governing state and method for disputes related to the agreement. All parties should agree to pursue arbitration, mediation, or litigation to handle conflicts or contract violations.
9. Finalize and sign: Once all terms have been agreed upon, each party should sign the agreement to implement it.

View the free loan agreement template from Legal Templates for more information about the formatting and terms to include. Our customizable loan agreement form allows you to add interest rates, fees, and payment conditions. Use our downloadable template, available in PDF and Word format, to define your loan terms.

This is a document preview. Your customized version will be created after you answer a few quick questions.

State of ______________

LOAN AGREEMENT

This Loan Agreement (this “Agreement”), is made as of this ______ day of _______________, 20______

(the “Effective Date”) by and among/between:

Borrower(s): ________________________________________________, located at _______________

_________________________________________ [Address] ("Borrower"), and

Lender(s): ________________________________________________, located at _________________

_______________________________________ [Address] (“Lender”).

The parties agree as follows:

1. Loan Amount. Lender agrees to loan Borrower the principal sum of $_____________ (the “Loan”),

together with interest on the outstanding principal amount of the Loan (the "Principal Balance"), and in

accordance with the terms set forth below.

2. Repayment of Loan. (Check one)

☐ Single Payment. The Loan together with accrued and unpaid interest and all other charges, costs

and expenses, is due and payable (Check one) ☐ on demand of the Lender ☐ on or before

____________________, 20______.

☐ Regular Payments. The Loan together with accrued and unpaid interest and all other charges, costs

and expenses, is due and payable on or before ____________________, 20______. All payments under

this Agreement are applied first to accrued interest and then to the Principal Balance. The Loan shall be

payable in installments equal to $_____________. The first payment is due on ____________________,

20______ and due thereafter in __________ [Number of payments] equal consecutive: (Check one)

☐ Monthly installments. Each successive payment is due on the __________ day of the month.

☐ Quarterly installments. Each successive payment is due on the __________ day of the

quarter.

☐ Semi-annual installments. Each successive payment is due on the __________ day of the

half-year.

☐ Annual installments. Each successive payment is due on the __________ day of the year.

3. Security. (Check one)

☐ The loan is secured by collateral. Borrower agrees that until the Loan together with interest is paid in

full, the Loan will be secured by __________________________________________________________,

and Borrower hereby grants to Lender a security interest in and to such property.

☐ The loan is NOT secured by collateral.

4. Guaranty. (Check one)

☐ There is a guarantor. ________________________ located at

_______________________________ __________________ (“Guarantor”) promises to unconditionally

guarantee to Lender, the full payment and performance by Borrower of all duties and obligations arising

under this Agreement. Guarantor agrees that this guaranty shall remain in full force and effect and be

binding on Guarantor until this Agreement is satisfied.

☐

There is NO guarantor.

5. Interest. The Principal Balance shall bear interest at the rate of __________% per annum, accruing

daily. Notwithstanding, the total interest charged shall not exceed the maximum amount allowed by law

and Borrower shall not be obligated to pay any interest in excess of such amount.

6. Late Fee. (Check one)

☐ There is a late Fee. If Borrower fails to make a payment due under this Agreement within _________

days after the due date, Borrower agrees to pay to Lender a late payment fee of __________% of the

amount then due.

☐

There is NO late fee.

7. Prepayment. (Check one)

☐ Borrower has the right to prepay all or any part of the Loan, together with accrued and unpaid interest

thereon, at any time without prepayment penalty or premium of any kind. Borrower must provide

__________ days prior written notice to Lender of the prepayment and the amount of the prepayment.

Discount (Check one)

☐ If Borrower pays all of the Loan, together with accrued interest, on or before

____________________, 20______, Lender will give a discount of __________% of the Principal

Balance then due.

☐ Not applicable.

☐

Borrower does NOT have the right to prepay all or any part of the Loan.

8. Acceleration. (Check one)

☐ In the event Borrower is more than __________ days late with a payment, Lender in its sole discretion

may demand that the Principal Balance and any accrued and unpaid interest be immediately due and

payable in full.

☐

In the event Borrower is late with a payment, Lender may NOT accelerate the Loan.

9. Remedies. Lender may enforce its rights or remedies in equity or at law, or both, whether for specific

performance of any provision in this Agreement or to enforce the payment of the Loan or any other legal or

equitable right or remedy. The rights and remedies of Lender now or hereafter existing at law or in equity

or by statute or otherwise shall be cumulative and shall be in addition to every other such right or remedy.

10. Costs and Expenses. Borrower shall pay to Lender all costs of collection, including reasonable

attorney's fees, Lender incurs in enforcing this Agreement.

11. Waiver. Borrower and all sureties, guarantors and endorsers hereof, waive presentment, protest and

demand, notice of protest, demand and dishonor and nonpayment of this Agreement.

12. Successors and Assigns. This Agreement will inure to the benefit of and be binding on the respective

successors and permitted assigns of Lender and Borrower.

13. Joint and Several Liability. The obligation of each Borrower shall be joint and several under this

Agreement.

14. Amendment. This Agreement may be amended or modified only by a written agreement signed by

Borrower and Lender.

15. Notices. Any notice or communication under this Loan must be in writing and sent via one of the

following options: (Check all that apply)

☐ Delivery in Person

☐ Overnight Courier Service

☐ Certified or Registered Mail (Postage Prepaid, Return Receipt Requested)

☐ Facsmile

☐ Electronic Email Transmission

☐ Other: _____________________________________________________

16. No Waiver. Lender shall not be deemed to have waived any provision of this Agreement or the exercise

of any rights held under this Agreement unless such waiver is made expressly and in writing. Waiver by

Lender of a breach or violation of any provision of this Agreement shall not constitute a waiver of any other

subsequent breach or violation.

17. Severability. In the event that any of the provisions of this Agreement are held to be invalid or

unenforceable in whole or in part, the remaining provisions shall not be affected and shall continue to be

valid and enforceable as though the invalid or unenforceable parts had not been included in this Agreement.

18. Assignment. Borrower shall not assign this Agreement, in whole or in part, without the written consent

of Lender. Lender may assign all or any portion of this Agreement with written notice to Borrower.

19. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of

the State of _________________, not including its conflicts of law provisions.

20. Disputes. Any dispute arising from this Agreement shall be resolved through: (Check one)

☐ Court litigation. Disputes shall be resolved in the courts of the State of ______________.

(Check if applicable)

☐ If either Party brings legal action to enforce its rights under this Agreement, the prevailing

party will be entitled to recover from the other Party its expenses (including reasonable attorneys’

fees and costs) incurred in connection with the action and any appeal.

☐ Binding arbitration. Binding arbitration shall be conducted in accordance with the rules of the American

Arbitration Association.

☐ Mediation.

☐ Mediation, then binding arbitration. If the dispute cannot be resolved through mediation, then the

dispute will be resolved through binding arbitration conducted in accordance with the rules of the

American Arbitration Association.

21. Entire Agreement. This Agreement contains the entire understanding between the parties and

supersedes and cancels all prior agreements of the parties, whether oral or written, with respect to such

subject matter.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first stated above.

SIGNATURES

Borrower Signature

Borrower Full Name

Borrower Signature

Borrower Full Name

Borrower Signature

Borrower Full Name

Borrower Signature

Borrower Full Name

Grantor Signature

Grantor Full Name

Lender Signature

Lender Full Name

Lender Signature

Lender Full Name

Lender Signature

Lender Full Name

Lender Signature

Lender Full Name