Free Loan Agreement

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Loan Agreement


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Real estate

Your Loan Agreement

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


__________ of ______________________________________
(the "Lender")



__________ 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 fulfill the promises and conditions set out in this Agreement:

  1. Loan Amount & Interest
  2. The Lender promises to loan $____________________USD to the Borrower and the Borrower promises to repay this principal amount to the Lender, without interest payable on the unpaid principal, beginning on October 29, 2020.
  3. Payment
  4. This Loan will be repaid in full on October 29th, 2020.
  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 and interest due 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 Commonwealth of Virginia.
  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 under hand and seal on this ________ day of ________________, ________

this ________ day of ________________, ________.




this ________ day of ________________, ________.




Loan Agreement Information

Alternate Names:

A Loan Agreement is also known as:

  • Promissory Note
  • IOU
  • Term Loan
  • Note Payable

What is a Loan Agreement?

A Loan Agreement is a document between a borrower and lender that details a loan repayment schedule.

LawDepot's Loan Agreement can be used for business loans, student loans, real estate purchase loans, personal loans between friends and family, down payments, and more.

Why should I use a Loan Agreement?

Using a Loan Agreement can protect you as a lender because it legally enforces the borrower's pledge to repay the loan in regular payments or a lump sum.

A loan contract is also useful to a borrower because it spells out the details of the loan for his or her records and is handy for keeping track of payments.

What can you use a Loan Agreement for?

  • Business loans, such as capital loans for startup businesses
  • Real estate loans, such as a down payment on a home or real estate purchase
  • Student loans or educational expenses
  • Purchases, such as furniture, electronics, vehicle, boat etc.
  • Personal loans or IOUs between friends or family

What is the difference between a Loan Agreement and Promissory Note?

Although similar, a Loan Agreement tends to include a more detailed payment schedule, while a Promissory Note is more often used for simple loan terms.

Typically, a Promissory Note only requires the signature of a borrower, whereas the Loan Agreement should include signatures from both parties.

What is included in a Loan Agreement?

Method of Payment

The method of payment is how the borrower intends to pay the lender.

For example:

Bill lends his friend Sally $400 for her car payment. She can pay him back in many different ways:

Method Interest Payment To be paid Paid by
One lump sum -- $400 In full Fixed date (e.g. March 3)
Regular payments -- $100 Monthly Four months' time
Regular payments towards interest 5% $20 Monthly End of term + principal ($400)
Regular payments towards interest + principal 5% $120 Monthly Four months' time

Repayment Schedule

The schedule outlines when the loan needs to be repaid by. It can be in one of two ways:

  • Fixed date (e.g. May 30)
  • Notice to repay/demand loan agreement (e.g. The lender issues a notice to repay for 7 days. The borrower must pay within that time frame).

The schedule also includes how often the money will be repaid, in what amount and when the payment is due (e.g. $200 to be paid on the 1st of each month).

Loan Amount

The loan amount is the amount of money being lent to the borrower. Interest can be charged on the loan amount (usually set as a percentage) and this interest is added to the principal amount (or original amount loaned).

You also have the option to compound the interest, which means interest will be charged on the principal amount as well as the previously accumulated interest, resulting in a slightly higher interest rate overall.

Lender and Borrower Details

A Lender and borrower can be either an individual or corporation.


A Loan Agreement may include collateral, which is a form of security for the lender in the event the borrower is unable to repay them.

Common forms of collateral may include a vehicle, equipment, or jewelry.

Should I charge interest in the Loan Agreement?

Interest is a way for the lender to charge money on the loan and compensate the lender for the risk involved with the transaction.

You may choose to begin charging interest or increase the interest rate if the borrower fails to make a payment on time. The increased interest provides you with additional compensation for the borrower's failure to pay as promised and the trouble of having to enforce the Loan Agreement.

Related Documents:

Frequently Asked Questions:

Loan Agreement FAQ
Sample of LawDepot’s Loan Agreement template


Loan Agreement

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