Free loan agreement template (Word)

LOAN AGREEMENT

This Loan Agreement is made on [Agreement date] between [Lender name], [Lender address] (the "Lender"), and [Borrower name], [Borrower address] (the "Borrower").

1. The loan

The Lender will lend the Borrower [Loan amount] (the "Loan"), paid to the Borrower on [Disbursement date] by [Transfer method]. The Borrower will use the Loan only for [Loan purpose].

2. Interest

Interest accrues on the unpaid balance at [Interest rate] per year, calculated daily on a 365-day year, from the date the Loan is paid to the Borrower until it is repaid. If that rate is higher than the maximum rate the law allows, the maximum lawful rate applies instead.The Loan is interest-free.

3. Repayment

The Borrower will repay the Loan with interest in [Installment count] [Installment frequency] instalments of [Installment amount], starting on [First payment date], with any remaining balance due on [Maturity date].The Borrower will repay the Loan with interest in one payment on or before [Maturity date]. Payments will be made to: [Lender payment details]

The Borrower may repay all or part of the Loan early without penalty. Early payments are applied first to interest due and then to the balance.

If a payment is more than [Grace days] days late, the Borrower will also pay a late fee of [Late fee], to the extent permitted by law.

4. Security and guarantee

To secure repayment, the Borrower grants the Lender a security interest in the following property: [Collateral description]. Until the Loan is repaid in full, the Borrower will keep that property in good condition and will not sell, give away or borrow against it without the Lender's written consent.The Loan is unsecured.

[Guarantor name], [Guarantor address] (the "Guarantor"), guarantees that the Borrower will pay every amount due under this Agreement, and will pay any such amount on demand if the Borrower does not.

5. Default

The Borrower is in default if a payment is more than [Default days] days late, if the Borrower becomes insolvent or bankrupt, or if anything the Borrower told the Lender to obtain the Loan was materially untrue. If the Borrower is in default, the Lender may, by written notice, require immediate repayment of the whole unpaid balance and interest. The Borrower will also pay the Lender's reasonable costs of collecting overdue amounts, including legal fees, to the extent permitted by law.

6. General

This Agreement is the entire agreement between the parties about the Loan. Any change must be in writing and signed by both parties. If any part of this Agreement cannot be enforced, the rest remains in effect. This Agreement is governed by the laws of [Governing law].

Lender: ____________________________ [Lender name]

Borrower: ____________________________ [Borrower name]

Guarantor: ____________________________ [Guarantor name]