How do I write a simple Loan Agreement?

A personal loan agreement should include the following information:

  1. Names and addresses of the lender and the borrower.
  2. Information about the loan cosigner, if applicable.
  3. Amount borrowed.
  4. Date the loan was provided.
  5. Expected repayment date.
  6. Interest rate, if applicable.
  7. Annual percentage rate (APR), if applicable.

How do I make a Loan Agreement between friends?

  1. Ask for a plan.
  2. Review the borrower’s finances and help them set up a budget that includes your monthly repayment.
  3. Make sure they understand this is a loan, not a gift.
  4. Set terms that both sides agree can be enforced … and enforce them!
  5. Keep your distance.
  6. Get it down on paper.

What makes a Loan Agreement legal?

All loan agreements must specify general terms that define the legal obligations of each party. For instance, the terms regarding repayment schedule, default or contract breach, interest rate, loan security, as well as collateral offered must be clearly outlined.

What is a free Loan Agreement?

A Loan Agreement is a document between a borrower and lender that details a loan repayment schedule. You can use our Loan Agreement template for a variety of purposes, including: Personal lending between friends or family. Business transactions, such as securing capital for a startup.

Can I legally lend money to a friend?

Is lending money legal? Yes, it is. It is legal to lend money, and when you do, the debt becomes the borrower’s legal obligation to repay. For smaller loans, you can take legal action against your borrower if they do not pay by taking them to small claims court.

What is a fair interest rate for a friend?

Consider Whether to Charge Interest How much that interest should be is up to you, but you’d probably want to charge no more than a bank. Typically, lenders will charge anywhere from a friendly 3% to an obscene 36%. If this is to a family member or friend, you should probably stay on the low side.