Fillable Form Loan Agreement Template

What is a Loan Agreement?

A Loan Agreement also referred to as a loan contract or a lending agreement is a document used between a lender and a borrower. Most loan agreements can come from official lenders, such as banks or credit unions, or from informal lenders or situations, such as a friend who lends you money. The basic contents of loan agreements are as follows:

• The amount you’re lending;
• The date when you promise to pay the amount back; and
• Fees and penalties you agreed to pay depending on the situation.

The most common loan agreements are unsecured loans. But if you drafted a secured loan agreement form, you must have collateral to the said agreement to back up the loan, such as your home or car.

A loan agreement’s purpose is to determine what the parties are agreeing to, the responsibilities each party has, and the duration of the agreement. You must keep in mind that the loan agreement shall be under the state and federal regulations protecting the lender and borrower in case a party fails to honor the agreement.

Loan agreements also specify how the proceeds are used. This contract is proof that the borrower and the lender both agreed that the funds will be utilized for a specific purpose, how the loan will be paid, and the amortization rate. The loan must be paid back to the lender right away if the loan is not used for any specific purpose.

For informal situations, loan agreement forms are also used for borrowing or loaning money to your family members or a friend. A loan agreement is essential to prevent arguments and misunderstandings over terms and conditions. It also protects both parties if the matter shall reach a court, and the court will use this form to determine if the terms and conditions are satisfied.

If you’re drafting a Loan Agreement Template, you also have to prepare a contingency plan. You can answer the following questions:

• What if the borrower cannot pay his payments due?
• What would be the fees and penalties that are considered just, fair, and acceptable to both parties?
• What would happen if the borrower becomes incapacitated or dies?

If a loan agreement contract has interest included, you may include an amortization table to determine how the loan will be paid overtime and how much is the interest per payment.

You may download a PDF copy of the Loan Agreement Template anywhere online, but you may electronically fill it out on PDFRun for your convenience.

How to fill out a Loan Agreement?

A Loan Agreement PDF requires you to fill out the necessary information. Make sure that all information you enter is true, accurate, and correct.

Date

Enter the date.

Borrower’s Name

Enter the Borrower’s full legal name.

Borrower’s Address

Enter the Borrower’s complete address.

Lender’s Name

Enter the Lender’s full legal name.

Lender’s Address

Enter the Lender’s complete address.

Loan Amount

Enter the loan amount.

The loan amount is the principal sum together with the interest on the principal balance and in accordance with the terms of this Loan Agreement.

The second paragraph explains that the principal amount of the loan along with the accrued and unpaid interest and other charges or expenses shall be due and payable on or before the stated date. It also explains further that all payments under this Loan Agreement Contract shall be applied to the accrued interest first and then to the balance of the outstanding principal.

Payment Date

Enter the payment date.

Prepayment

This paragraph states that the Borrower has the right to prepay all or part of the principal amount of the loan, along with the accrued and unpaid interest, at any time without prepayment penalty or premium of any kind.

Costs and Fees

This paragraph states that in case there is a default, the Borrower shall pay to the Lender all costs of collection, including reasonable attorney’s fees.

Waiver

This paragraph states that the Borrower and all sureties, guarantors, and endorsers waive the presentment, protest, and demand notice of protest, demand and dishonor, and nonpayment of this loan.

Successors and Assigns

This paragraph explains that this loan will inure to the benefit of and be binding on the respective successors and permitted assigns of the Borrower. It also explains further that the Borrower may not assign its rights or delegate its duties under this loan without the Lender’s prior written consent.

Joint and Several Liability

This paragraph states that if there is more than one Borrower in this Loan Agreement Form, the obligation of each Borrower shall be joint and several.

Amendment

This paragraph states that a Loan Agreement may be amended or modified only through a written agreement signed by both the Borrower and Lender.

Severability

If there are provisions of this loan that are invalid or unenforceable in whole or in part, the rest of the provisions shall not be affected and shall continue to be valid as though the invalid or unenforceable parts had not been included in this loan.

Notifications

This paragraph states that any notice or communication under this loan must be in writing and sent using any of the following options written here.

Enter the option where the communication shall be notified.

Governing Law

This paragraph states that this loan shall be governed and construed in accordance with the laws of the state where this loan was signed.

Choose from the dropdown list the state the loan was made.

Signature

Affix the signature of the Borrower.

Frequently Asked Questions About a Loan Agreement

How to file a Loan Agreement?

Both the lender and borrower must have a copy of the loan agreement. A borrower must send a copy of the loan agreement to the lender.

While most financial institutions have loan agreement templates where they base their loan agreements, you have to draft your own if you are borrowing from someone else. In this case, you have the option to consult a lawyer to have a clearer process on how to draft your own Loan Agreement PDF template.

Once the borrower and the lender have agreed to the terms and conditions and drafted the loan agreement, you need to notarize or have a third party act as a witness during the signing of the contract.

Can you get out of a loan agreement?

When you enter a loan agreement, you are typically bound by that contract until the loan is repaid in full. However, there may be some circumstances in which you can get out of the agreement early. Some of the situations are:

• If the lender agrees to let you out of the contract — When a lender agrees to let you out of your loan contract, it is typically in writing.
• If you refinance the loan with another lender — You may be able to find a new lender who is willing to give you a better interest rate or terms regarding the loan. This is sometimes called refinancing.
• If you sell the property that was purchased with the loan — In some cases, you may be able to sell the property that was purchased with the loan and use the proceeds from the sale to pay off the loan.
• If you default on the loan — If you default on your loan, the lender may choose to foreclose on your property. This means that they will take back possession of the property and sell it in order to recoup their losses.
• If the lender agrees to a deed in lieu of foreclosure — In some cases, the lender may agree to accept a deed in lieu of foreclosure. This is where you transfer ownership of the property back to the lender in exchange for them forgiving the loan.

Each situation is different, so it's important to talk to your lender about your options if you're having trouble making payments on your loan. The best way to approach this conversation is to be honest about your financial situation and to ask for their help in finding a solution.

If you cannot come to an agreement with your lender, you may need to consider other options, such as filing for bankruptcy. This is the last resort option and should only be considered if you're unable to work out a repayment plan with your lender.

What is the difference between a loan agreement and a promissory note?

A loan agreement and a promissory note are documents that are used to establish the terms of a loan.

A loan agreement is a more comprehensive document that outlines all of the terms and conditions of the loan, while a promissory note is a simpler document that only states the borrower's promise to repay the loan. Both documents are legally binding and can be used to enforce the repayment of the loan.

There are situations when one document may be more appropriate than the other. For example, if the loan is for a large amount of money and will be paid back over a long period of time, then a loan agreement would be more appropriate. If the loan is for a smaller amount of money and will be paid back relatively quickly, then a promissory note would suffice.

It's important to consult with an attorney or financial advisor to determine which document is right for your particular situation. Also, be sure to read over both documents carefully before signing anything, as they are both legally binding and may have serious consequences if not followed correctly.

Is a loan agreement a contract?

A loan agreement is a contract between a borrower and a lender.

As a contract, it outlines the terms of the loan, including the repayment schedule and interest rate.

It also includes provisions for what happens if the borrower defaults on the loan.

A loan agreement is a legally binding contract that can be enforced in court if necessary. Therefore, it is important to make sure that you understand all of the terms of the agreement before signing it.

You should also consult with an attorney to make sure that the agreement is fair and to your benefit. When you are ready to sign the agreement, be sure to read it carefully and make sure that you understand all of the terms. Then, sign it in front of a witness to make it legally binding.

If you default on the loan, the lender can take legal action against you to collect the money you owe. In some cases, the lender may even be able to seize your assets or garnish your wages in order to get repaid, depending on the terms of the loan agreement.

Therefore, it is important to make sure that you can afford the monthly payments before taking out a loan. You should also only borrow as much money as you need and be sure to repay the loan on time to avoid defaulting.

Defaulting on a loan can have serious consequences, so it is important to understand the terms of your loan agreement before signing it. If you have any questions about the agreement, be sure to ask the lender or your attorney before signing. Once you sign, you are legally obligated to repay the loan according to the terms of the agreement.

How do I get a copy of my loan agreement?

If you would like a copy of your loan agreement, you should contact your lender directly.

Your lender should be able to provide you with a copy of your agreement free of charge. If you are having difficulty obtaining a copy of your agreement from your lender, you can also request a copy from the Consumer Financial Protection Bureau (CFPB).

The Consumer Financial Protection Bureau (CFPB) is the U.S. government agency that makes sure banks, lenders, and other financial companies treat consumers fairly. You can submit a complaint with the CFPB if you have a problem with a financial product or service.

The CFPB will work with your lender to try to get a copy of your agreement for you. If you are still having trouble obtaining a copy of your loan agreement, you may want to consider hiring an attorney. An attorney may be able to help you obtain a copy of your agreement, negotiate better terms for your loan, or both.

Does a loan agreement mean approval?

No, a loan agreement does not guarantee approval for a loan. The agreement is simply a contract between the borrower and lender that lays out the terms of the loan. The lender may still deny the loan after reviewing the agreement.

While a loan agreement is not a guarantee of approval, it is still a good idea to have one in place. This way, both the borrower and lender know what to expect from the loan and can avoid any misunderstandings. Having a loan agreement can also help speed up the approval process, as it provides the lender with all of the necessary information in advance.

Does a loan agreement need to be registered?

No, a loan agreement does not need to be registered. However, we recommend that you consult with a lawyer to ensure that the agreement is legally binding and to protect your rights.

Is a loan agreement legally binding?

Yes, a loan agreement is legally binding. This means that both parties are obligated to uphold their end of the deal. If either party fails to do so, they may be held liable in a court of law. It is important to note, however, that not all loan agreements are created equal. Some may be more binding than others, depending on the terms and conditions set forth therein.

For instance, a loan agreement that includes a collateral clause is typically more binding than one that does not. This is because the collateral serves as a security for the loan, and the lender can take possession of it if the borrower defaults on the loan. As such, it is in the best interest of both parties to ensure that all terms and conditions set forth in the agreement are met.

If you are unsure about the binding nature of your loan agreement, it is best to consult with an attorney.

What happens if you break a loan agreement?

If you break a loan agreement, you may face legal consequences:

• The lender may sue you for breach of contract — When this happens, a court may order you to pay damages to the lender.
• The lender may take possession of your collateral — If you pledged collateral as part of the loan agreement, the lender may take possession of that collateral if you default on the loan.
• Your credit score could suffer — A negative mark on your credit report could make it more difficult and expensive to get future loans.

These are just some of the possible consequences of defaulting on a loan agreement. Depending on the type of loan and other factors, you may face different or additional consequences. If you're having trouble making payments, reach out to your lender as soon as possible to discuss your options. Defaulting on a loan should always be a last resort.

Is a loan agreement a promissory note?

A loan agreement is not a promissory note. While these financial documents serve as records of the borrower's indebtedness, they differ in a few key ways.

A promissory note is simply a written acknowledgment of debt. It outlines the amount borrowed, the interest rate (if any), and when the borrower intends to repay the loan. On the other hand, a loan agreement is a more comprehensive document that also includes collateral information, default provisions, and repayment plan details.

Loan agreements are generally used for more sizable loans, such as mortgages or business loans. Promissory notes are more often used for personal loans and small debts between friends or family members.

Different situations call for different financial documents. It's important to consult an attorney or financial advisor to ensure you're using the right one.

What makes a loan agreement legal?

There are a few key elements that must be present in order for a loan agreement to be considered legal:

• Both parties must be in agreement and sign the document.
• The terms of the loan must be clearly stated and agreed upon by both parties.
• The loan must be for a specific amount of money and the repayment schedule must be agreed upon.
• Both parties must agree to the interest rate (if any) that will be charged on the loan.
• The loan agreement must be dated and signed by both parties.

If all of these elements are present, then the loan agreement is considered to be legal and binding. If any of these elements are missing, then the agreement may not be enforceable in court.

Who is the first party in a loan agreement?

The first party in a loan agreement is the lender. The lender may be an individual, a financial institution, or a government entity. The second party in a loan agreement is the borrower. The borrower is the party who receives the loan and is obligated to repay the loan according to the terms of the agreement.

Does a loan agreement need to be stamped?

There is no legal requirement for a loan agreement to be stamped, but it is generally recommended as this can help to prove the existence and terms of the agreement if there is ever any dispute. If you do not stamp the agreement, you may find it more difficult to enforce the terms of the loan if something goes wrong. Nevertheless, a loan agreement that is not stamped can still be binding if all other legal requirements are met. If you are unsure whether or not to stamp your loan agreement, you should speak to a lawyer for advice.

Is an unregistered loan agreement valid?

Whether an unregistered loan agreement is valid or not depends on the jurisdiction in which the agreement was made. Some jurisdictions may consider an unregistered loan agreement to be valid, while others may not.

In many cases, an unregistered loan agreement may still be binding on the parties even if it is not considered to be valid. This means that the parties may still be required to perform their obligations under the agreement, and may be held liable for breach of contract if they do not. However, an unregistered loan agreement may not be enforceable in court. This means that if one party tries to sue the other for breach of contract, the court may not hear the case or may not enforce the terms of the agreement.

It is important to check the laws of the jurisdiction in which the agreement was made to determine whether an unregistered loan agreement is valid. If you are unsure, you should seek legal advice.

What makes a loan agreement unenforceable?

There are a number of ways that a loan agreement can become unenforceable and the most common reasons are the following:

• The agreement was not properly signed and witnessed — Signing the loan agreement is required in order for it to be legally binding. Without proper signatures, the agreement cannot be enforced. Moreover, in some jurisdictions, the loan agreement must be notarized in order for it to be valid.
• The agreement is illegal — If the agreement contains any illegal provisions, then it will not be enforceable. For instance, if the loan agreement requires the borrower to engage in criminal activity, then the agreement is unenforceable.
• The agreement is impossible to perform — If the terms of the agreement are impossible to perform, then the agreement cannot be enforced. For example, if the loan agreement requires the borrower to repay the loan in a single payment that is greater than what they can realistically afford, then the agreement is unenforceable.
• The agreement is unconscionable — If one party to the agreement is unduly disadvantaged by the terms of the agreement, then the agreement may be found to be unconscionable and unenforceable.
• The agreement has expired — Most loan agreements will contain a term specifying when the loan must be repaid. If this date has passed, then the agreement is no longer enforceable.
• The debt has been discharged in bankruptcy — If the borrower has filed for bankruptcy and received a discharge of their debt, then the loan agreement is no longer enforceable.
• The statute of limitations has expired — In most jurisdictions, there is a statute of limitations that limits how long a creditor has to file a lawsuit to collect on a debt. If this time period has expired, then the agreement is no longer enforceable.

If any of these reasons apply, then the loan agreement is unenforceable and the creditor cannot take legal action to collect on the debt. However, even if the agreement is unenforceable, the borrower still owes the debt and the creditor may attempt to collect through other means, such as wage garnishment or seizure of assets. Therefore, it is important for borrowers to understand their rights and obligations under a loan agreement before signing it.

Does a loan agreement need to be witnessed?

There is no requirement for a loan agreement to be witnessed in order for it to be legally binding. However, it is generally recommended that all parties to the agreement sign the document in the presence of a witness, as this can help to prevent any later disputes about the terms of the agreement. If you are planning to borrow or lend a large amount of money, it is also worth consulting with a lawyer to ensure that the agreement is properly drafted and meets your needs.

Related Articles:

• What is a Loan Agreement?
• Loan Agreements: Everything You Need to Know
• Personal Loan Agreement: How to Create This Borrowing Contract
• Loan Agreement: 7 Most Important Terms To Include - Contracts Counsel