Loan Agreement

This agreement is used if you are assigning a loan to or taking from someone and want to avoid any misunderstanding by laying down the terms and conditions beforehand. Borrowing and lending money involves various rights and liabilities. For the lender, it involves risk. Therefore, it is necessary to enter into this agreement to avoid any future troubles. For borrower, the agreement lays down the details of the sum, the interest and other provisions so the lender cannot change the repayment scheme at his/her will.

To make it legally binding, the agreement should be printed on a non-judicial stamp paper, sealed (if any) and signed by the borrower, the lender and the concerned witnesses. Use this agreement if You wish to take a loan and want to lay down the terms in writing. You wish to lend money to someone and want to let the borrower know the terms in writing.

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Frequently Asked Questions

This agreement is used if you are assigning a loan to or taking from someone and want to avoid any misunderstanding by laying down the terms and conditions beforehand. Borrowing and lending money involves various rights and liabilities. For the lender, it involves risk. Therefore, it is necessary to enter into this agreement to avoid any future troubles. For borrower, the agreement lays down the details of the sum, the interest and other provisions so the lender cannot change the repayment scheme at his/her will.
Who needs this agreement and why?
To make it legally binding, the agreement should be printed on a non-judicial stamp paper, sealed (if any) and signed by the borrower, the lender and the concerned witnesses. Use this agreement if You wish to take a loan and want to lay down the terms in writing. You wish to lend money to someone and want to let the borrower know the terms in writing.
What is the use of Annexure?
The following are all the major clauses included in this agreement:
  1. Loan Amount and Interest- this clause mentions the amount that has been borrowed.
  2. Interest- specifies the interest rate that is levied on the principal amount.
  3. Term- states the specific timeline including the commencement date.
  4. Late Fee- outlines the consequences of paying late fee and also assigns a duty to the borrower to pay late fee charge.
  5. Default- states the effects of default on part of the borrower.
  6. Pre- Payment- provides against the borrower repaying the loan in whole or in part without the lender's prior permission.
  7. Cost and Expenses- explains that both the parties must reimburse each other and bear the total expenses incurred on execution of the agreement.
  8. Assignment- declares that both the parties require a prior permission before assigning their obligations and rights to someone else.
  9. Relationship- defines how the borrower and lender are related through this agreement.
  10. Waiver- explains the conditions of voluntary surrender by the lender.
  11. Amendments- states that the agreement can be modified only through a written executed instrument.
  12. General Provisions- explains the necessity of the headings used throughout the agreement.
  13. Severability- states that if any provision in the agreement cannot be fulfilled, then it will be removed, while the rest of the provisions will still remain in place.
  14. Jurisdiction- mentions the laws under which the agreement is to constructed.
  15. Entire Agreement- holding of exclusiveness of this agreement in relation to any other previous agreements.
These are a few terms which might be useful to read about for a better understanding of this agreement:
  1. Lender- an organization or a person that lends money.
  2. Borrower- an individual, organization or company that is using funds, materials or services on credit.
  3. Waiver- the voluntary surrender of any right or claim by a party.
  4. Amendment- a minor change or addition designed to improve a text, agreement etc.
What are the legal jargons used in this agreement?
There is no Annexure section in this agreement.
How to use this agreement?
The following are all the major clauses included in this agreement:
  1. Loan Amount and Interest- this clause mentions the amount that has been borrowed.
  2. Interest- specifies the interest rate that is levied on the principal amount.
  3. Term- states the specific timeline including the commencement date.
  4. Late Fee- outlines the consequences of paying late fee and also assigns a duty to the borrower to pay late fee charge.
  5. Default- states the effects of default on part of the borrower.
  6. Pre- Payment- provides against the borrower repaying the loan in whole or in part without the lender's prior permission.
  7. Cost and Expenses- explains that both the parties must reimburse each other and bear the total expenses incurred on execution of the agreement.
  8. Assignment- declares that both the parties require a prior permission before assigning their obligations and rights to someone else.
  9. Relationship- defines how the borrower and lender are related through this agreement.
  10. Waiver- explains the conditions of voluntary surrender by the lender.
  11. Amendments- states that the agreement can be modified only through a written executed instrument.
  12. General Provisions- explains the necessity of the headings used throughout the agreement.
  13. Severability- states that if any provision in the agreement cannot be fulfilled, then it will be removed, while the rest of the provisions will still remain in place.
  14. Jurisdiction- mentions the laws under which the agreement is to constructed.
  15. Entire Agreement- holding of exclusiveness of this agreement in relation to any other previous agreements.

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