Loaning money to a borrower always carries the inherent risk that the borrower can't or won't pay back the money. There is also a risk to the borrower that the lender reneges on the loan or refuses to make the funds available.
In either of those scenarios, a Loan Agreement provides the basis for legal action. The borrower may be forced by a court to repay the borrower according to the terms in the agreement. A court can also compel the lender to go through with the Loan Agreement if the borrower chooses to pursue it.
A Loan Agreement is a legally-binding document that establishes the conditions of a loan between a borrower and a lender. Loan Agreements can be used for business loans, personal loans, and all other types of loans.
Once a Loan Agreement is signed, neither party can change their minds about the terms. The lender must honor the promise to provide money to the borrower, and the borrower must repay that money as stipulated in the Loan Agreement.
Depending on your state, jurisdiction, or context, a Loan Agreement may also be known as:
I Owe You (IOU)
By using the attorney-vetted forms on 360 Legal Forms, you'll ensure that you have the correct type and wording of the form you need for your jurisdiction.
Guarantor: A person who is legally responsible for the loan in case the borrower can't pay it back
Secured Loan: A type of loan that requires the borrower to pledge an asset or assets as collateral
Collateral: Any assets that the lender can take in exchange for the loan amount if the borrower fails to repay
Variable Rate: An interest rate that can change during the course of the loan
Origination Fee: A fee that a lender can charge the borrower to process the loan
Default: When the borrower fails to repay the loan
Any individual or organization that needs to provide a legal framework for the terms of a loan can do so through the use of a Loan Agreement. Loan Agreements don't need to be any more complicated than the terms of a loan require.
When loaning money between friends and family, many people choose not to use a Loan Agreement. However, using a Loan Agreement can be a wise decision in any situation in which a borrower receives money from a lender.
Loan Agreements aren't necessarily a sign of distrust between the two parties involved in a loan. Instead, think of a Loan Agreement as standard practice when lending or borrowing money. There is no good reason for either party to want to avoid a Loan Agreement if it is entered in good faith.
Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your Loan Agreement.
Each document on 360 Legal Forms is customized for your state.
All you have to do is fill out a simple questionnaire, print, and sign. No printer? No worries. You and other parties can even sign online.
A poorly-composed Loan Agreement can be just as bad as not having one at all. 360 Legal Forms provides you with the right wording for a Loan Agreement in your jurisdiction with an attorney-vetted form.
The process is fast and easy. Our proprietary form generator can help you create your customized Loan Agreement in a few short minutes.
We'll ask a handful of simple questions. Just fill in the requested information, and we'll put it together. You can see your document being created as you go.
Once completed, simply download your form as a PDF or Word document from your secure online account.
To create your document, please provide:
Personal Information of the Borrower: Name and address of the person who's borrowing money and responsible for the repayment
Personal Information of the Lender: Name and address of the person who's lending money and entitled to receive the repayment
Principal Amount: The amount of money in question
Interest: Money that is paid in excess of the loan amount as a condition of the loan
Security: Any assets that will be used as collateral
Maturity Date: Date by which the borrower is required to repay the money
Default: How many days of nonpayment constitute a default
Dispute Resolution: If a dispute about the loan arises, will it be settled through a court of law or arbitration?
Governing State: Which of the state's laws will apply to the terms of the Loan Agreement?
A Loan Agreement needs to be signed by the borrower and the lender. Loan Agreements don't need to be notarized, but you may choose to do so to avoid any legal complications.
After creating and signing your Loan Agreement with 360 Legal Forms, you can download and print as many copies as you like. Both the borrower and the lender should retain a signed copy for their personal records. There is no need to file a Loan Agreement at the Recorder's Office.
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