💰 Personal Loan Agreement Template — Free Template

A personal loan agreement (promissory note) for loans between individuals or to a small business.

Who needs this

Individuals lending money to family, friends, or small businesses, or borrowers wanting to formalize a loan.

What it covers

• Principal & interest
• Repayment schedule
• Late fees
• Default & acceleration
• Prepayment
• Collateral (optional)

Template clauses

1. Loan Amount

The Lender hereby loans to the Borrower the principal sum of $[AMOUNT] (the "Loan"). The Borrower acknowledges receipt of the Loan and promises to repay the Lender in accordance with this Agreement.

2. Interest

Interest shall accrue on the unpaid principal balance at the rate of {{interest_rate}}% per annum, calculated as {{interest_method}} interest. The interest rate shall not exceed the maximum rate permitted by applicable law.

3. Repayment

The Borrower shall repay the Loan in [NUMBER] equal {{installment_frequency}} installments of $[AMOUNT], beginning on [START DATE] and continuing until paid in full. The final payment shall be due on [MATURITY DATE].

4. Prepayment

The Borrower may prepay all or any portion of the Loan at any time without penalty. Prepayments shall be applied first to accrued interest, then to principal.

5. Late Fees

Any payment more than ten (10) days late shall incur a late fee of $[AMOUNT] or {{late_fee_percent}}% of the overdue payment, whichever is greater.

6. Default

The Borrower shall be in default if: (a) any payment is more than thirty (30) days late; (b) the Borrower files for bankruptcy; or (c) the Borrower breaches any other provision of this Agreement. Upon default, the Lender may declare the entire unpaid balance immediately due and payable.

7. Collateral

{{#when loan_secured=no}}No collateral secures this Loan; it is an unsecured loan.{{/when}}{{#when loan_secured=yes}}The following collateral secures this Loan: {{collateral_description}}.{{/when}}

8. Costs of Collection

If the Lender must take action to collect any amount due, the Borrower shall pay all reasonable costs of collection, including attorneys' fees and court costs.

9. Governing Law

This Agreement shall be governed by the laws of [STATE/COUNTRY].

10. Entire Agreement

This Agreement constitutes the entire agreement between the parties regarding the Loan and supersedes all prior discussions.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date written above.

[PARTY A NAME]
Signature: __________________________
Date: ______________

[PARTY B NAME]
Signature: __________________________
Date: ______________

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