"Loan Agreement Template"

What Is a Loan Agreement?

A Loan Agreement is a legal contract signed between a borrower and a lender, in which a borrower receives a loan from a lender and is legally bound to pay it back. The purpose of the contract is to formalize all regulations concerning the receiving of the loan and paying it back, and state all of the terms that the parties have agreed on.

Different types of these agreements can be distinguished depending on the parties that are entering the contract and its purpose. They can include:

  1. Commercial Loan Agreement. This type of Loan Agreement is used when the loan is being taken for business purposes.
  2. Personal Loan Agreement. A legal contract in which the borrower is receiving the loan for personal purposes. This is also the most popular type of Loan Contract.
  3. Family Loan Agreement. A type of document where the borrower and the lender are relatives.

A Loan Agreement template can be downloaded below, or you can make your own using our online form builder.

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What Is a Loan Participation Agreement?

Sometimes the borrower requires an extremely large loan from the bank, and when this happens the bank seeks assistance. They sign a loan participation agreement with other banks or financial institutions, in which they make them their co-lenders in that loan. In this case, the leading bank shares the risks and profits with other lenders that have signed the contract and became lenders.

Using this kind of contract has a lot of benefits for each party involved. The borrower receives their large loan, the leading bank receives the opportunity to give the loan (sometimes they have to refuse it since the loan is too big and lose the client), and the other lenders can participate in the loan and get profit out of it.

How to Write a Loan Agreement?

Writing a legal contract is always a time-consuming process. In order not to miss any important details the lender should include a few important parts in their Loan Agreement form, which include the following:

  1. Introduction. In the first part of the contract, the parties involved should state their personal information. For example, a Loan Agreement between individuals should designate their full names and full current addresses.
  2. The Loan. Here the agreement should state all the information about the loan, such as how much money is being lent, how and when it will be transferred to the borrower, the interest rate (if applicable), the purpose of the loan, etc.
  3. Terms and Conditions. Parties use this part of the document to designate all of the important terms and conditions, such as how the loan will be paid back, how often the payments will be made, how big the payments will be, payment instructions for the borrower (if there are any), etc.
  4. Prepayment. If the parties have agreed that the borrower has a right to pay the full loan back or make the payments earlier than they are scheduled, a section where it will be stated should be included in the contract.
  5. Rights and Responsibilities of Parties. The lender and the borrower should designate all of their rights and responsibilities in this part of the contract. For example, it can include the borrower's responsibility to pay the loan back on time, to use the loan in accordance with the purposes stated in the contract, etc.
  6. Security. If the loan amount is secured with a piece of the borrower's property, it should be mentioned here, The parties should describe the property that will be transferred to the ownership of the lender if the borrower fails to pay the loan back, stating its main characteristics and individualizing features.
  7. Penalties. If there are any penalties that the parties have agreed on they should be entered here. For example, parties should designate the late fee amount and how it will be paid.
  8. Signatures. To state that the parties are entering the agreement under their own free will and to express their consent with everything stated here, they should sign the document.

Parties can include other sections in the document that they have agreed on, such as severability, information about representatives, fees and expenses, successors, remedies, governing law, etc.


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Loan Agreement
This ​ L oan Agreement (hereinafter referred to as the “Agreement”) is entered into as of
________________ by and between _____________________, with a mailing address of
________________________________________________________________________
______________ (hereinafter referred to as the “Lender”) and _____________________,
with a mailing address of ___________________________________________________
_____________________________________ (hereinafter referred to as the “Borrower”),
collectively referred to as the “Parties,” both of whom agree to be bound by this
Agreement.
IN CONSIDERATION OF the Lender loaning certain monies (hereinafter referred
to as the "Loan") to the Borrower, and the Borrower repaying the Loan to the
Lender, both Parties agree to keep, perform and fulfill the promises and conditions
set out in this Agreement:
1. Loan Amount & Interest​ . The Lender promises to loan $_______________________
to the Borrower and the Borrower promises to repay this principle amount to the Lender,
with interest payable on the unpaid principal at the rate of _________________________
per _________________________.
2. Payment​ . This Loan will be repaid in full on ________________.
3. Default​ . Notwithstanding anything to the contrary in this Agreement, if the Borrower
defaults in the performance of any obligation under this Agreement, then the Lender may
declare the principal amount owing and interest due under this Agreement at that time to
be immediately due and payable.
Further, if the Lender declares the principal amount owing under this Agreement to be
immediately due and payable, and the Borrower fails to provide full payment, interest at
the rate of ___________% percent per annum, calculated yearly, will be charged on the
outstanding amount, commencing the day the principal amount is declared due and
payable until the full payment is received by the Lender.
4. Costs​ . All costs, expenses, and expenditures including, without limitation, the
complete legal costs incurred by enforcing this Agreement as a result of any default by
the Borrower, will be added to the principal then outstanding and will immediately be
paid by the Borrower.
©​ ​ ​ ​ ​ ​ ​ ​ ​ ​
T EMPLATEROLLER.COM​ ​ ​
Loan Agreement
This ​ L oan Agreement (hereinafter referred to as the “Agreement”) is entered into as of
________________ by and between _____________________, with a mailing address of
________________________________________________________________________
______________ (hereinafter referred to as the “Lender”) and _____________________,
with a mailing address of ___________________________________________________
_____________________________________ (hereinafter referred to as the “Borrower”),
collectively referred to as the “Parties,” both of whom agree to be bound by this
Agreement.
IN CONSIDERATION OF the Lender loaning certain monies (hereinafter referred
to as the "Loan") to the Borrower, and the Borrower repaying the Loan to the
Lender, both Parties agree to keep, perform and fulfill the promises and conditions
set out in this Agreement:
1. Loan Amount & Interest​ . The Lender promises to loan $_______________________
to the Borrower and the Borrower promises to repay this principle amount to the Lender,
with interest payable on the unpaid principal at the rate of _________________________
per _________________________.
2. Payment​ . This Loan will be repaid in full on ________________.
3. Default​ . Notwithstanding anything to the contrary in this Agreement, if the Borrower
defaults in the performance of any obligation under this Agreement, then the Lender may
declare the principal amount owing and interest due under this Agreement at that time to
be immediately due and payable.
Further, if the Lender declares the principal amount owing under this Agreement to be
immediately due and payable, and the Borrower fails to provide full payment, interest at
the rate of ___________% percent per annum, calculated yearly, will be charged on the
outstanding amount, commencing the day the principal amount is declared due and
payable until the full payment is received by the Lender.
4. Costs​ . All costs, expenses, and expenditures including, without limitation, the
complete legal costs incurred by enforcing this Agreement as a result of any default by
the Borrower, will be added to the principal then outstanding and will immediately be
paid by the Borrower.
©​ ​ ​ ​ ​ ​ ​ ​ ​ ​
T EMPLATEROLLER.COM​ ​ ​
5. Binding Effect​ . This Agreement will pass to the benefit of and be binding upon the
respective heirs, executors, administrators, successors, and permitted assigns of the
Borrower and Lender. The Borrower waives presentment for payment, notice of
non-payment, protest, and notice of protest.
5. Amendments​ . This Agreement may only be amended or modified by a written
instrument executed by both the Borrower and the Lender.
6. Severability​ . The clauses and paragraphs contained in this Agreement are intended to
be read and construed independently of each other. If any term, covenant, condition, or
provision of this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, it is the Parties' intent that such provision be reduced in scope by
the court only to the extent deemed necessary by that court to render the provision
reasonable and enforceable and the remainder of the provisions of this Agreement will in
no way be affected, impaired or invalidated as a result.
7. General Provisions​ . Headings are inserted for the convenience of the Parties only and
are not to be considered when interpreting this Agreement. Words in the singular mean
and include the plural and vice versa.
8. Legal and Binding Agreement. ​ T his Agreement is legal and binding between the
Parties as stated above. This Agreement may be entered into and is legal and binding both
in the United States and throughout Europe. The Parties each represent that they have the
authority to enter into this Agreement.
9. Governing Law. ​ T he Parties agree that this Agreement shall be additionally governed
by the laws of _____________________.
State
The Parties agree to the terms and conditions set forth above as demonstrated by their
signatures as follows:
_________________________________
_________________________________
Lender’s Printed Name
Borrower’s Printed Name
_________________________________
_________________________________
Lender’s Signature
Borrower’s Signature
_________________________________
_________________________________
Date
Date
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T EMPLATEROLLER.COM​ ​ ​
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