Free Loan Agreement

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Loan Agreement

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LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement") dated this ________ day of ________________, ________

Lender

__________of ______________________________________
(the "Lender")

Borrower

__________of ______________________________________
(the "Borrower")

IN CONSIDERATION OF the Lender loaning certain monies (the "Loan") to the Borrower, and the Borrower repaying the Loan to the Lender, both parties agree to keep, perform and fulfil the promises and conditions set out in this Agreement:

  1. Loan Amount & Interest
  2. The Lender promises to loan £____________________GBP to the Borrower and the Borrower promises to repay this principal amount to the Lender, without interest payable on the unpaid principal, beginning on 17 August 2019.
  3. Payment
  4. This Loan will be repaid in full on 17 August 2019.
  5. Default
  6. 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 under this Agreement at that time to be immediately due and payable.
  7. Governing Law
  8. This Agreement will be construed in accordance with and governed by the laws of the Country of England.
  9. Costs
  10. 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.
  11. Binding Effect
  12. 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.
  13. Amendments
  14. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.
  15. Severability
  16. 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.
  17. General Provisions
  18. 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. Words in the masculine mean and include the feminine and vice versa.
  19. Entire Agreement
  20. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

IN WITNESS WHEREOF, the parties have duly affixed their signatures on this ________ day of ________________, ________

SIGNED, SEALED AND DELIVERED
before me, this ________ day of ________________, ________

   


_____________________________
__________

     


SIGNED, SEALED AND DELIVERED
before me, this ________ day of ________________, ________

   


_____________________________
__________

     
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Loan Agreement Details

What is a Loan Agreement?

A Loan Agreement, also referred to as a term loan or loan contract, is created when a lender agrees to lend money to a borrower. The loan contract acts as an enforceable promise between the parties where the borrower must pay back the lender according to a payment plan.

When is a Loan Agreement used?

A Loan Agreement can be used when an individual or business lends money to another individual or business, in which a written payment plan is required for the borrower to repay the amount back in installments over a predetermined time period.

How do I create a payment plan?

The payment plan you choose to use in your Loan Agreement depends on how the borrower will make payments. There are typically four options:

  • Lump sum payment at the end of the term: the borrower pays the entire amount back in one lump sum on a specified date or upon demand.

  • Regular payments: the lender specifies the amount and interval they wish to receive payments from the borrower. Any remaining balance is paid at the end of the term.

  • Regular payments towards principal and interest: if the money is lent on a rate of interest, the lender can choose for the borrower to make regular payments that go towards the principal, as well as the interest as it accrues. There will be no large payment at the end of the term as the payment amount is calculated to pay off the principal and the interest by the end of the term.

  • Regular payments only towards interest: the borrower pays installments towards the interest only, and pays the principal amount back at the end of the term.

What is term length?

Term length refers to the date when the loan will need to be paid back to the lender. If the lender issues a notice to repay, the borrower must pay back their loan within a certain time period after the notice is served.

What is interest?

Interest is usually a percentage of the principal amount. It is charged on the outstanding amount owed to make up for the cost of inflation as well as to reimburse the lender for the risk and opportunity cost of lending his or her money to a borrower.

What is collateral?

Collateral or security may be used to secure the repayment of a loan. It is usually a tangible asset, such as a vehicle or other asset worth the equivalent of the loan itself.

If the borrower defaults on their loan payments, the lender can go to court to foreclose the collateral to remedy their loss. Collateral is typically used when a significant amount of money has been lent, there is a high chance the borrower may default, or where the lender is also selling the collateral to the borrower.

Where can I use this Loan Agreement?

You can create and customise this Loan Agreement for the following regions:

  • England
  • Wales
  • Scotland
  • Northern Ireland

Frequently Asked Questions:

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