Free Loan Agreement

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

Free Loan Agreement

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

Loan Agreement

Loan Amount


Loan Amount

How much is being loaned?
S$



Frequently Asked Questions
What is compound interest?Simple interest is calculated based only on the original loan amount. In contrast, compound interest is calculated based on both the original loan amount as well as the accumulated interest from previous periods.

The more frequently interest is compounded, the more interest will grow. For example, interest compounded monthly will result in more overall interest paid than interest compounded annually.
What happens if I charge interest?If a lender charges interest to a borrower, this will create a rebuttable assumption that the lender is a ‘moneylender', in which case the restrictions set out in the Moneylenders Act and Rules will apply to you. The Moneylenders Act and Rules apply to lenders that carry on or hold themselves out as carrying on the business of moneylending. To be a moneylender in Singapore requires a licence. The Moneylenders legislation puts restrictions on moneylenders, such as maximum allowable interest rates, as well as requirements, such as providing statements of account, receipts and other documents. If you are, or think you might be a moneylender, consult with the applicable legislation for the restrictions and requirements that may apply to you.


Your Loan Agreement

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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, 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 S$____________________ to the Borrower and the Borrower promises to repay this principal amount to the Lender, without interest payable on the unpaid principal, beginning on 2 July 2022.
  3. Payment
  4. This Loan will be repaid in full on 2 July 2022.
  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 Singapore.
  9. Costs
  10. 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.
  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
this ________ day of ________________, ________.

   


_____________________________
__________

     


SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

   


_____________________________
__________

     

Last updated: April 12, 2022

What is a Loan Agreement?

A Loan Agreement is a contract that sets out the terms of a loan between a lender and borrower. Our Loan Agreement template can be used for loans between family members and friends or for more formal lending situations, such as borrowing money from a company.

To create a complete and comprehensive Loan Agreement, you should specify the loan amount, any interest charges, a repayment plan, and a payment date or schedule. Although you can lend or borrow money without documenting the arrangement, a written contract provides both parties with specific loan terms and sets clear expectations.

A Loan Agreement is also known as a:

  • Private Loan Agreement
  • Secured Loan Agreement
  • Personal Loan Contract
  • Demand Loan Agreement

What is the purpose of Loan Agreements?

Loan Agreements protect the interests of both lenders and borrowers by documenting the terms of a loan. If either party does not abide by the terms of the loan, the wronged party can take legal action against the other and use the document to prove their case. 

As a lender, a Loan Agreement can help you legally enforce a borrower's pledge to pay you back. As a borrower, a Loan Agreement spells out the details of the loan for your records and can help you keep track of payments.

When should a Loan Agreement be used?

A Loan Agreement can be used in most private lending situations. Many lenders do not loan out money without having a Loan Agreement in place because they want to ensure that they will be paid back. Create a Loan Agreement any time you are lending money to:

  • Businesses, such as start-up companies or corporations
  • Individuals, such as family members and friends

Alternatively, you can also use a Promissory Note when lending money. Promissory Notes are less formal than Loan Agreements.

How do I write a Loan Agreement?

The easiest way to create a Loan Agreement is by using a Loan Agreement template. Our template includes the important clauses that a Loan Agreement needs but also allows you to add additional terms to fit your unique lending situation. Our template is also customised to Singapore's laws.

You can create your document by entering the following information into our Loan Agreement template:

  • The lender's and borrower's information
  • The loan amount
  • The interest rate and any late fees
  • The repayment method
  • Any collateral terms

What is a secured Loan Agreement?

A secured Loan Agreement is one where the borrower provides collateral. Collateral is an asset or piece of property offered by the borrower to secure repayment of a loan. If a borrower secures a Loan Agreement with collateral and fails to repay the loan, the lender can seize the asset as compensation.

Secured Loan Agreements are most useful when there is a higher risk that the borrower will default on the loan or a substantial amount is being loaned. If the loan is not secured with collateral, the lender risks losing the amount loaned if the borrower is unable to repay.

Should I charge interest in my Loan Agreement?

Choosing to charge interest or not depends largely on your specific situation. If you are lending money to a family member or friend, you may feel uneasy about charging them interest and profiting from the transaction. As a lender, you are under no obligation to charge interest.

However, choosing to charge interest can also come with its benefits. Besides allowing you to make some money, charging interest can incentivise a borrower to make payments on time and pay back the loan within the designated time. Keep in mind that there can be limits on interest rates.

In Singapore, when you charge interest to a borrower, there is a rebuttable assumption that you are a moneylender. In this case, the restrictions set out in the Moneylenders Act 2008 and Moneylenders Rules 2009 will apply to you. This legislation puts restrictions on moneylenders, such as maximum allowable interest rates, as well as requirements, such as providing statements of account, receipts, and other documents. If you are or think you might be a moneylender, consult with the applicable legislation for the restrictions and requirements that may apply to you.

Should someone witness my Loan Agreement?

Although it is rarely required by law to have a witness sign a Loan Agreement, it can still be a good idea. Having the lender's and borrower's signatures witnessed strengthens the agreement and adds legitimacy. If a dispute ever arises because either party does not follow the terms of the Loan Agreement, the presence of a witness's signature can be immensely helpful.

Should Loan Agreements be notarised?

In most situations, you do not need to notarise your Loan Agreement. However, like a witness signature, notarisation can help verify the identity of the person signing the document and add legitimacy to your document. Notarisation also confirms that all signers understand the meaning of what they are signing.

Is a Loan Agreement legally binding?

Yes, a Loan Agreement is legally binding. If a borrower does not pay back a loan, the lender can take legal action against them and use the document to prove the borrower's obligation to pay them back. Likewise, if a lender is demanding payment from a borrower earlier than what their Loan Agreement stipulates, the contract binds the lender to follow the original terms.

Related documents:

  • Bill of Sale: Transfer ownership of an item from a seller to a buyer.
  • Promissory Note: Create an enforceable promise for a borrower to pay back a loan or debt to a lender.
  • Confidentiality Agreement: Protect sensitive information shared between two parties by prohibiting the disclosure of this information to third parties.
  • Independent Contractor Agreement: Outline the terms of a contractual relationship between an independent contractor and a client.
  • Non-Disclosure Agreement: Maintain privacy in situations where sensitive information is exchanged between two parties.
  • Partnership Agreement: Establish the rules for a general partnership and the rights and responsibilities of the partners.
  • Service Contract: Outline the terms of a given service between a service provider and a customer.
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