Loan Agreement Template

Buying a car? Short of finances? No problem - get a car loan! Buying a house - home loan is at your door step! Okay, this is not a satirical take on those who apply for loans. What I wanted to allude is the fact that loans have become very commonplace now. For almost anything and everything you can avail a loan. Be it a house, a car, or even repaying a loan as well! To make the transactions easier and hassle-free, banks and financial institutions use this template. A loan agreement template refers to the document or the format in which the terms, conditions, and details related to the loan are laid down.

Loan Agreement Format

A format for a loan agreement typically includes -

• Borrower
• Lender
• Amount of loan
• Period of loan
• Interest rate (relative to a nominated base rate)
• Monthly repayment

This is the standard for an agreement of any kind of loan. Although the order may vary and according to the type of loan, additions can be made. For instance the agreement may also include specifications related to penalties or discounts applicable to the borrower in case there is a default or the borrower wants to payback the loan before the stipulated time. Let's take a look at an actual sample.

Loan Agreement Sample

CONSUMER LOAN AGREEMENT 1. Parties: The undersigned is ______________________, the Borrower, and the Lender is _______________________________________. 2. Date of Agreement: ________________________________________________. 3. Promise to Pay: Within _____ months from today, Borrower promises to pay to Lender_________________________ dollars ($_______) and interest and other charges stated below. 4. Responsibility: Although this agreement may be signed below by more than one person, each of the signatories understand that they are individually, jointly, and severely liable for paying back the full amount. 5. Breakdown of Loan: Borrower will pay: Amount of Loan: $__________ Other (Describe): $__________ Amount financed: $__________ Finance charge: $__________ Total of payments: $__________ ANNUAL PERCENTAGE RATE ________________% 6. Repayment: Borrower will repay in the following manner: Borrower will repay the amount of this note in _____equal uninterrupted monthly installments of $____________ each on the _____ day of each month starting on the _____day of _______, 20____, and ending on _________, 20____. 7. Prepayment: Borrower has the right to prepay the whole outstanding amount at any time. If Borrower pays early, or if this loan is refinanced or replaced by a new note, Lender will refund the unearned finance charge, figured by the Rule of 78-a commonly used formula for figuring rebates on installment loans. 8. Late Charge: Any installment not paid within ten (10) days of its due date shall be subject to a late charge of 5% of the payment, not to exceed $____________ for any such late installment. 9. Security: To protect Lender, Borrower gives what is known as a security interest or mortgage in: [Describe:] ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. Default: If, for any reason, Borrower fails to make any payment on time, Borrower shall be in default. The Lender can then demand immediate payment of the entire remaining unpaid balance of this loan, without giving anyone further notice. If Borrower has not paid the full amount of the loan when the final payment is due, the Lender will charge Borrower interest on the unpaid balance at ______ percent ( %) per year. 11. Right of Offset: If this loan becomes past due, the Lender will have the right to pay this loan from any deposit or security Borrower has with this lender without notice to him/her. If the Lender gives Borrower an extension of time to pay this loan, he/she still must repay the entire loan. 12. Collection fees: If this note is placed with an attorney for collection, then Borrower agrees to pay an attorney's fee of fifteen percent (15%) of the unpaid balance. This fee will be added to the unpaid balance of the loan. 13. Co-borrowers: Any Co-borrowers signing this agreement agree to be equally responsible with the borrower for this loan. Agreed To: ______________________________ Lender ______________________________ Borrower ______________________________ Borrower

This template is used for almost all the loans, right from the commercial secured loans to small personal loans like, perhaps, pay day loans. As mentioned earlier, this may slightly change depending on the type of loan.

At the end of the day, this agreement is a very important document as this agreement can be used as a concrete proof in an event of a court intervention. Therefore, please check out the correct loan agreement template and use it before you prepare the agreement.