Parties: Enter the full names and complete addresses of both the Borrower and the Lender. To correctly include these elements in your Loan Agreement, you must include the following:ĭate of commencement: Include when the Loan Agreement will begin There should be no ambiguity at any stage, or it could lack the clout necessary to hold a breaching party to account. There are a few important points to remember when you write a Loan Agreement.įirst, you must use clear and easy-to-understand language so that it is immediately obvious who is who in the agreement and how the money should be repaid.Īfter all, a Loan Agreement is a legally enforceable contract, so it must be obvious to anyone reading it what the terms are and who the parties bound by it are. IOU: An IOU is an agreement made between a borrower and lender, it is known as a friendly loan agreement because it is informal, however, it can be used in court. Student loans : A student loan is used to allow a college or university learner to pay their tuition and living costs.įederal Housing Administration (FHA) loans: This kind of loan is available to a borrower who wishes to buy a house but has a credit rating below 580. Personal loan: A personal loan agreement allows a borrower and a lender who are family members or friends to outline the details of money being lent.įamily loan agreement: A personal loan given by a member of your immediate family.Ĭar loans: These are paid when the borrower wishes to purchase a new car or vehicle.

Home equity loans: A loan that is secured against real estate property owned by the borrower such as a house.īusiness loans: These kinds of arrangements are used to help people secure funds to set up a new business venture or to invest in a pre-existing enterprise. This sort of financial contract might be used for one of the following types of loan: We can also prepare the necessary paperwork when the loan needs to be secured against a property by way of a legal charge.There are many different types of loan agreements that can be used depending on your specific necessities. We are able to draft bespoke agreements for simple and complex arrangements alike, at a competitive fixed fee. Our expert solicitors provide guidance as to the meaning and effect of contract clauses. In particular, if lending is carried on by way of business then it is likely to be caught by the FCA’s regulatory regime.

Please note that we would always strongly advise you to seek independent, professional legal advice before entering into a binding contract. If you are planning to borrow or loan a sum of money from or to another person or business, it is advisable to formally record the terms of the agreement in an enforceable contract. Here is a free template agreement, in Microsoft Word format, which can be tailored to your specific needs.

Simple business loan agreement template