When it comes to lending or borrowing money, it`s always a good idea to document the terms and conditions of the loan in writing using a loan agreement. This helps both parties remember what was agreed upon and can provide legal protection in case of disputes or default.
If you`re looking for a simple and straightforward loan agreement template, we`ve got you covered. Here`s an example of what a basic loan agreement might look like:
LOAN AGREEMENT
Borrower`s name: [Name]
Lender`s name: [Name]
Date: [Date]
Loan amount: [Amount in dollars]
Interest rate: [Percent]
Repayment term: [Number of months/years]
1. Loan purpose: The borrower agrees to use the loan funds solely for the purpose of [insert purpose].
2. Repayment terms: The borrower agrees to repay the loan in monthly installments of [insert amount] starting on [insert date]. The loan will be fully repaid by [insert date].
3. Interest rate: The loan will accrue interest at a rate of [insert percentage], compounded [insert frequency], from the date of disbursement until the loan is repaid in full.
4. Late payment fees: If the borrower fails to make a payment on time, a late fee of [insert dollar amount or percentage] will be assessed.
5. Prepayment penalty: The borrower may prepay the loan in full at any time without penalty.
6. Default and remedies: If the borrower defaults on the loan, the lender may take legal action to recover the loan amount plus interest, fees, and costs.
7. Governing law: This agreement shall be governed by and construed in accordance with the laws of [insert state or country].
8. Entire agreement: This loan agreement constitutes the entire understanding between the parties and supersedes all prior negotiations, understandings, and agreements.
By signing below, the borrower and lender acknowledge and agree to the terms of this loan agreement.
Borrower`s signature: _________________________________
Lender`s signature: ____________________________________
As you can see, this sample loan agreement is quite simple and straightforward. However, it`s important to note that the terms and conditions of any loan agreement should be tailored to the specific needs and circumstances of the parties involved. It`s always a good idea to consult with a lawyer or financial advisor before finalizing any loan agreement.
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