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If you've ever loaned money and not been repaid, you understand the need for a Loan Agreement. A legally-binding Loan Agreement not only maps out the terms of the loan, but it also protects you if... Read more

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Sample Loan Agreement

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$                             Date:

For value received, the undersigned (the "Borrower"), at , , , promises to pay to the order of (the "Lender"), at , , (or at such other place as the Lender may designate in writing), the sum of $with interest from , on the unpaid principal at the rate of % per annum.


    1. Payments

      Unpaid principal after the Due Date shown below shall accrue interest at a rate of % annually until paid.

      The unpaid principal and accrued interest shall be payable in monthly installments of $, beginning on , and continuing until , (the "Due Date"), at which time the remaining unpaid principal and interest shall be due in full.

    2. Application of Payments

      All payments on this Note shall be applied first in payment of accrued interest and any remainder in payment of principal.

    3. Late Fee

      The Borrower promises to pay a late charge of $for each installment that remains unpaid more than day(s) after its Due Date. This late charge shall be paid as liquidated damages in lieu of actual damages, and not as a penalty. Payment of such late charge shall, under no circumstances, be construed to cure any default arising from or relating to such late payment.

    4. Acceleration of Debt

    If any payment obligation under this Note is not paid when due, the remaining unpaid principal balance and any accrued interest shall become due immediately at the option of the Lender.


    The Borrower reserves the right to prepay this Note (in whole or in part) prior to the Due Date with no prepayment penalty. Any such prepayment shall be applied against the installments of principal due under this note in the inverse order of their maturity and shall be accompanied by payment of accrued interest on the amount prepaid to the date of prepayment.


    If any payment obligation under this Note is not paid when due, the Borrower promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process.


    If any of the following events of default occur, this Note and any other obligations of the Borrower to the Lender, shall become due immediately, without demand or notice:

    1. the failure of the Borrower to pay the principal and any accrued interest when due;

    2. the liquidation, dissolution, incompetency or death of the Borrower;

    3. the filing of bankruptcy proceedings involving the Borrower as a debtor;

    4. the application for the appointment of a receiver for the Borrower;

    5. the making of a general assignment for the benefit of the Borrower's creditors;

    6. the insolvency of the Borrower;

    7. a misrepresentation by the Borrower to the Lender for the purpose of obtaining or extending credit; or

    8. the sale of a material portion of the business or assets of the Borrower.


    If any one or more of the provisions of this Note are determined to be unenforceable, in whole or in part, for any reason, the remaining provisions shall remain fully operative.


    All payments of principal and interest on this Note shall be paid in the legal currency of the United States. The Borrower waives presentment for payment, protest, and notice of protest and demand of this Note.

    No delay in enforcing any right of the Lender under this Note, or assignment by Lender of this Note, or failure to accelerate the debt evidenced hereby by reason of default in the payment of a monthly installment or the acceptance of a past-due installment shall be construed as a waiver of the right of Lender to thereafter insist upon strict compliance with the terms of this Note without notice being given to Borrower. All rights of the Lender under this Note are cumulative and may be exercised concurrently or consecutively at the Lender's option.

    This note may not be amended without the written approval of the holder.


    This Note shall be construed in accordance with the laws of the State of .


    unconditionally guarantees all the obligations of the Borrower under this Note and agrees that any modifications of the terms of payment or extension of time of payment shall in no way impair its guarantee, and expressly agrees its guarantee of any modifications or extensions of this Note.


This Note shall be signed by and , on behalf of

. This Note shall also be co-signed by .


IN WITNESS WHEREOF, this Agreement has been executed and delivered in the manner prescribed by law as of the date first written above.

Signed this day of , , at ,

. Borrower:

By: Date:


By: Date:


By: Date:


Annual Percentage Rate = 0.0000% Principal = $0.00

Payment Number

Payment Date

Total Payment

Interest Amount

Principal Amount

Loan Balance

















Grand Total




Making a Loan Agreement

  • What is a Loan Agreement?

    If you've ever loaned money and not been repaid, you understand the need for a Loan Agreement. A legally-binding Loan Agreement not only maps out the terms of the loan, but it also protects you if the borrower defaults on the loan and fails to pay you back as agreed.

  • How do I write a Loan Agreement?

    It's easy to make a Loan Agreement on Rocket Lawyer. Just answer a few critical questions, and we'll generate the proper legal language for your contract. Before you write your own Loan Agreement, you should know some of the basic details that are included. For example, you'll need to identify who the lender and borrower are, and you should know the general terms and conditions of your loan, such as, how much money you are lending, and what your expectations are for being paid back.

  • What is included in a Loan Agreement?

    Our Loan Agreement Form can be used to create a legally-binding agreement suitable for any state. It is simple to use, and it only takes a few minutes to make. Even though it is easy to make the document, you'll need to gather a bit of information to make the process go faster.

    • Contact information
      • Legal name and address of the borrower and the lender.
    • Repayment options
      • You'll need to decide when payments are due or if you want the loan to be repaid in one lump sum. You can also configure the Loan Agreement to include monthly payments with a large balloon payment if you want.
    • Interest
      • Not everyone charges interest on a personal loan, but you can if you want to get paid back more than you loaned. You'll also need to decide how you want the interest paid and if there will be any benefits to the borrower if they pay the loan balance early.
    • Late fees and consequences of defaulting
      • You'll need to decide when payments are considered late and the amount of the late fee if any. If the borrower violates the terms of the agreement, you can define what happens if they default (such as transferring the ownership of collateral to you.)
    • Collateral
      • If someone is looking to borrow money from an individual, they likely do not qualify for a traditional bank loan, so collateral may be used to secure the loan. Typical collateral items include vehicles or real estate.
    • Cosigner
      • A cosigner is someone with good credit who is willing to take over payment responsibility for the loan if the borrower defaults or is unable to pay. A cosigner is often used to secure loans to young people who have not yet established their credit history.
    • Loan sales
      • You can include a provision in the agreement that allows the lender to sell the loan. This option is not extremely common in personal loans, but it is a possibility that you can include.
  • What are the types of loan structures I can agree to?

    With a Rocket Lawyer Loan Agreement, you can agree to various types of loan repayment structures including installment payments or a lump sum. Ultimately, the best payment schedule is one that the borrower can manage. With Rocket Lawyer, you have the flexibility to decide which payment schedule will work best for your loan.

    If this loan document doesn't fit your needs, we offer other types of loan contracts including:

    • Promissory Note
      • A Promissory Note is similar to a Loan Agreement. However, it is a simpler form and doesn't usually include as many provisions as a Loan Agreement.
    • IOU Form
      • An IOU agreement is a step above a handshake agreement. It is suitable for small personal loans.

    If you have questions about making your Loan Agreement, ask a lawyer.

  • What is the difference between a Loan Agreement and a Promissory Note?

    Essentially, a Loan Agreement and Promissory Note serve the same purpose as both being written agreements for loans, but a Loan Agreement typically contains more formalities and is more detailed than a Promissory Note.

    Can I write a personal Loan Agreement between family members?

    Yes, you can write a personal Loan Agreement between family members. It is important to follow contract formalities to hold both parties accountable. If there is a dispute, it will be difficult to prove the terms of your arrangement without a formal contract. If you've already loaned money and are having a difficult time collecting payments, see How to Collect Personal Debt from a Friend, Family Member or a Business.

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