When it comes to lending money, it`s always recommended to have a written agreement in place to protect both the lender and the borrower. This is where a loan agreement comes in handy. A basic simple loan agreement is a document that outlines the terms and conditions of a loan between two parties. In this article, we`ll provide a sample loan agreement that can be modified to suit your needs.

Introduction

This loan agreement is made between [lender`s name], hereinafter referred to as the “Lender”, and [borrower`s name], hereinafter referred to as the “Borrower”, on [date of agreement].

Loan Amount

The Lender agrees to loan the Borrower [amount in figures] dollars ($[amount in words]) to be repaid in [duration of repayment] months.

Interest Rate and Payment Schedule

The Borrower agrees to pay interest on the loan at a rate of [interest rate] per annum. The payment schedule for the loan will be as follows: [insert payment schedule]. The Borrower will make payments to the Lender on [insert payment due date] of each month.

Security

The Borrower shall provide [insert security agreement] as collateral for the loan. The Lender has the right to sell the collateral if the Borrower fails to repay the loan.

Prepayment

The Borrower may prepay the loan at any time without penalty.

Default

In the event of default, the Lender may declare the entire balance of the loan, including interest, immediately due and payable.

Governing Law

This loan agreement shall be governed by the laws of [state/province/country] and any legal proceedings related to this agreement shall be held in [city, state/province/country].

Amendments

This loan agreement may be amended or modified only by written agreement between the Lender and the Borrower.

Entire Agreement

This loan agreement constitutes the entire agreement between the Lender and the Borrower and supersedes all prior agreements and understandings between the parties.

Conclusion

A basic simple loan agreement is a simple yet effective document that can help protect both parties involved in a loan. It is important to have a written agreement in place to prevent misunderstandings and legal disputes. Use our sample loan agreement as a starting point to create a loan agreement that suits your specific needs.