Free Loan Agreement

Answer a few simple questions Print and download instantly It takes just 5 minutes

Create Your Free Loan Agreement

  1. Answer a few simple questions
  2. Email, download or print instantly
  3. Just takes 5 minutes

Loan Agreement

QGRole


lender
borrower


BackCreate My Document


Your Loan Agreement

Update Preview
This document preview is formatted to fit your mobile device. The formatting will change when printed or viewed on a desktop computer.
Page of
Page of

LOAN AGREEMENT

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

BETWEEN:


____________________ of ______________________________________
(the "Lender")

OF THE FIRST PART

AND


____________________ of ______________________________________
(the "Borrower")

OF THE SECOND PART

IN CONSIDERATION OF the Lender loaning certain monies (the "Loan") to the Borrower, and the Borrower repaying the Loan to the Lender, the 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 9 May 2026.
  3. Payment
  4. This Loan will be repaid in consecutive monthly instalments commencing on 9 May 2026 and continuing on the ninth of each following month until 9 May 2026 with the balance then owing under this Agreement being paid at that time.
  5. At any time while not in default under this Agreement, the Borrower may make lump sum payments or pay the outstanding balance then owing under this Agreement to the Lender without further bonus or penalty.
  6. Default
  7. 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.
  8. Governing Law
  9. This Agreement will be construed in accordance with and governed by the laws of the Country of England.
  10. Costs
  11. The Borrower shall be liable for all costs, expenses and expenditures incurred including, without limitation, the complete legal costs of the Lender incurred by enforcing this Agreement as a result of any default by the Borrower and such costs will be added to the principal then outstanding and shall be due and payable by the Borrower to the Lender immediately upon demand of the Lender.
  12. Binding Effect
  13. 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.
  14. Amendments
  15. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.
  16. Severability
  17. 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.
  18. General Provisions
  19. 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.
  20. Entire Agreement
  21. 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 ________________, ________.


 


_____________________________
____________________

Question Help
Loan Agreement Document Preview
Document PreviewAbout this Document
Last updated 7 May 2026

Written by 

Reviewed by 

|

Fact checked by 

What is a Loan Agreement?

A Loan Agreement is a legally binding contract between a lender and borrower that records the terms of a loan, including the amount borrowed, repayment schedule, interest, and each party’s obligations. 

A Loan Agreement may also be called a lending contract or loan contract. 

LawDepot’s Loan Agreement template helps you create a private loan contract for personal or business purposes while letting you add collateral, repayment terms, and other loan-specific details. 

Types of Loan Agreements

Loan Agreements can be secured or unsecured. The main difference is whether the borrower provides collateral to help secure repayment. 

  • Secured Loan Agreements are used when collateral assets back the loan. If a borrower doesn’t repay a secured loan, the lender may be able to recover the collateral under the terms of the agreement and applicable law. 

  • Unsecured Loan Agreements are used for loans without collateral assets. Because they lack collateral, unsecured loans may have higher interest rates. If a borrower doesn’t repay the loan, the lender may need to take legal action to collect the debt. 

Personal loans are often used between individuals, such as family members or friends, while business loans provide funding to a business.

When to use a Loan Agreement

Whether you’re a lender or a borrower, a Loan Agreement can help create a written record for a private loan. A written agreement is especially useful when the loan involves a larger amount of money, interest, collateral, or a repayment schedule. 

Before creating a final Loan Agreement, a Heads of Agreement can help outline preliminary terms for a proposed loan or related business arrangement.

For loans between family, friends, or businesses, a Loan Agreement can be useful when lending money for: 

  • Business costs, such as loans for start-ups or a parent company lending a significant sum to a subsidiary

  • Debt and bills, such as helping a family member pay outstanding bills

  • Real estate purchases, such as loaning funds to a sibling for a down payment

  • Vehicle purchases, such as lending money to a friend to purchase a car

For vehicle sales involving monthly instalments, leasing terms, and a final purchase option, a Contract Purchase Agreement can document the purchase terms separately from the loan terms.

If you have questions about Loan Agreements, you can consult a solicitor.

Looking to lend a smaller amount of money? Use a Promissory Note to create a simpler agreement with more basic lending terms for your loan.

Should I use a Loan Agreement?

Yes, using a Loan Agreement can help both parties understand their obligations to each other. Private loans are often less formal than loans from banks or larger financial institutions, so a written agreement can help protect both parties, especially for larger sums. 

Loan Agreements include more detailed terms than an I.O.U. or a verbal agreement, which can make each party’s responsibilities clearer.

For example, the agreement can clarify each party’s rights and responsibilities in the event of a dispute. If a dispute escalates, the written contract may serve as evidence in court. 

If a borrower fails to repay a loan or misses a payment, the lender may use a Demand Letter to request payment before taking further action permitted under the agreement.

What are the requirements for a Loan Agreement in the UK?

A UK Loan Agreement should clearly identify the lender and borrower, the loan amount, repayment terms, interest, key dates, and each party’s obligations.

To be legally binding, it generally needs to meet basic contract law requirements, including offer and acceptance, consideration, intention to create legal relations, legal purpose, and capacity.

Your Loan Agreement should include:

  • Full names and addresses of the borrower and lender

  • Loan amount

  • Repayment schedule

  • Interest and late payment terms, if applicable

  • Whether the loan is secured or unsecured

  • Governing law

  • Signatures from all parties

If a business lends money to an individual, the Consumer Credit Act 1974 may apply.

If you’re unsure whether your loan is regulated, consult a solicitor before signing.

Can I write my own Loan Agreement?

Yes, you can write your own Loan Agreement in the UK if it includes the necessary terms and both parties agree to them. A solicitor can review your agreement before signing if the loan is complex, high-value, secured by collateral, or may be regulated. 

Create your agreement with LawDepot’s customisable UK Loan Agreement template for use in England, Northern Ireland, Scotland, or Wales.

How to write your Loan Agreement with LawDepot

To write your Loan Agreement with LawDepot, answer a guided questionnaire about key elements such as loan details, repayment terms, parties, collateral, and signing requirements.

Before finalising a private or business loan, a lender may ask the borrower to provide a Financial Statement to better understand their financial position. 

1. Give the loan details

Add essential details regarding your loan, including:

  • The location where the loan is taking place

  • The loan amount and key dates

  • The interest rate and how often it might be compounded, if applicable

2. Outline the payments

Next, define how the borrower will repay the loan. This will include how often payments will be made, first and last payment dates, and a payment schedule.

LawDepot’s template also allows you to add early-repayment and late-payment terms. Be sure to include any late fees or interest that may apply to late payments. 

3. Identify both parties

Include both parties’ names and addresses. If there is more than one lender or borrower, include all applicable names.

Either party can be an individual or a business. If a company is lending or borrowing money, add the legal company name to your agreement. 

Then, add any co-signers to the agreement. A co-signer is an individual or company that agrees to repay the loan if the borrower breaches the terms of the Loan Agreement.

If someone is guaranteeing repayment of the loan separately, you may also need a Personal or Corporate Guarantee. 

4. Complete your document

Finally, complete your questionnaire by adding details about collateral, if applicable to your loan. 

You can also add any additional terms or special conditions that are not already covered in the Loan Agreement, and decide whether a witness will be present for signing.

Loan Agreement FAQs

Is a Loan Agreement legally binding in the UK?

toggle-arrow

Yes, a valid Loan Agreement is legally binding in the UK. Loan Agreements are primarily governed by contract law and generally need to include the basic legal elements of a valid contract.

These elements include:

  • Offer and acceptance: A lender offers a certain amount of money to the borrower with repayment terms, and the borrower accepts those terms. 

  • Consideration: Each party exchanges something of value.

  • Intention: Both parties intend to create a legally binding contract.

  • Legality: The agreement must have a lawful purpose. 

  • Capacity: Both parties must have the legal capacity to enter into the agreement.

The Consumer Credit Act 1974 may also apply to some businesses that lend money to individuals and can impose additional requirements, such as stricter consumer disclosures and protections.

What happens if a lender or borrower dies?

toggle-arrow

If a lender dies, the borrower is generally still responsible for repaying the loan, and payments may go to the lender’s estate. If the borrower dies before repaying the loan, their estate may be used to repay the outstanding debt.

When repayment obligations may affect an estate, consider discussing the loan with a solicitor or estate planning professional. 

What makes a Loan Agreement invalid?

toggle-arrow

A Loan Agreement may be invalid if it is incomplete, unclear, unlawful, or does not meet contract law requirements.

Examples of issues that may affect validity include:

  • Ambiguous or unfair terms

  • Clauses involving illegal activities

  • Fraud or misrepresentation

  • Either party lacks the capacity to enter into the agreement

  • No clear intention to create legal relations

You can use LawDepot’s customisable template to create a legally binding agreement governed by the law in England, Northern Ireland, Scotland, or Wales.

If you have questions about Loan Agreements, seek the advice of a solicitor or have them review your contract.

Do I need a witness when signing my Loan Agreement?

toggle-arrow

Having a witness for your Loan Agreement typically isn’t mandatory in the UK. However, it can be good practice, as a witness may help verify the parties’ signatures if a dispute arises.

Alternatively, you can sign your Loan Agreement in the presence of a notary or commissioner for oaths.

Check the relevant signing requirements if your Loan Agreement will be used outside the UK.

Can I use a Loan Agreement for a family loan?

toggle-arrow

Yes, you can use a Loan Agreement for a family loan. A written family loan agreement can help clarify the loan amount, repayment schedule, interest, deadlines, and what happens if the borrower misses a payment.

Related Documents:

  • Promissory Note
    Create a simple document that serves as an enforceable promise to repay a loan.
  • Bill of Sale
    Document the sale and transfer of an item between a buyer and a seller.
  • Sales Agreement
    Outline the terms and conditions of a future transaction between a seller and buyer.
  • Demand Letter
    Request an action or payment from another party.
Loan Agreement

SAMPLE

Loan Agreement

Personalize your Loan Agreement.

Print or download in minutes.

Create Your Loan Agreement

Create your Loan Agreement today
Get Started
This document preview is formatted to fit your mobile device. The formatting will change when printed or viewed on a desktop computer.
Loading ...
Loading ...

Note: Your initial answers are saved automatically when you preview your document.
This screen can be used to save additional copies of your answers.