Personal and small jobs
Personal loan agreement
The paper for money lent between people who know each other — a friend, a relative, a colleague. Its purpose is less about enforcement than about memory: it records what was lent, when, whether interest was agreed, and the repayment arrangement, so the two sides are not relying on a recollection of a conversation. Lending money is regulated in most places when it is done as a business, and rules on interest can apply even to private loans.
- In the catalogue
- Personal and small jobs
- Where it can live
- Any of the 184 governing laws
Who uses one
- People lending to family or friends who want the terms recorded.
- Anyone helping somebody with a deposit, a car or a business start.
- Borrowers who would rather have it written down than owe an unclear favour.
What you are deciding
- The amount, and the date it is handed over
- Whether interest is charged, and at what rate
- How it is repaid: instalments, a single date, or on demand
- What happens if a payment is missed
- Whether early repayment is allowed
- Whether anybody is guaranteeing it
- What happens if either person dies
Blanks you leave stay blank and wait in the room. Nothing is filled in from a guess.
The sections a draft usually has
- 1The parties
- 2The amount lent
- 3Interest
- 4Repayment schedule
- 5Early repayment
- 6Missed payments
- 7Guarantee, if any
- 8What happens on death
- 9Signatures
A general outline, not a required one. What turns up in a draft follows what you described. A contract is written in the order a contract is read.
What people call it
The names this kind of paper goes by. They are here because people search for them. They also filter the catalogue. They are not a wordlist the door matches. At the composer you describe the deal in your own words instead.
- personal loan agreement
- loan between friends
- family loan agreement
- money lending agreement
- iou agreement
- private loan contract
Questions people ask
- Does a loan between friends need to be in writing?
- Many systems recognise unwritten loans, but proving the terms afterwards is the difficulty. A short written record is mainly about evidence rather than validity.
- Can interest be charged on a private loan?
- Commonly yes, though several jurisdictions cap rates and some tax systems treat interest received as income. Whether a licence is needed generally depends on whether lending is being done as a business.
- Is it a loan or a gift?
- That is exactly what the paper settles. Where there is nothing in writing, the argument afterwards is usually about which of the two it was.
General answers about the document. Not advice about your situation. Not written about any one country.
Where it lives
A contract names the legal system it is governed by. That is a separate decision from which paper it is. You pick it at the door, from any of the 184 units in Governing law, including England and Wales, Delaware, California and New York.
You do not start from this page. Describe the deal in one sentence at the door. Read the draft back in plain language, in the order a contract is read.
Start it at the door →Related kinds