Free Loan Agreement Templates. Download, Customize & Sign.

A solid loan agreement should include: (1) names and contact details of lender and borrower, (2) loan amount and disbursement date, (3) interest rate - fixed or variable - and calculation method, (4) repayment schedule - installments, due dates, and payment method, (5) late payment fees and default consequences, (6) collateral or security if applicable, (7) prepayment terms, and (8) governing law and dispute resolution.

A secured loan agreement is backed by collateral - such as property, equipment, or other assets - that the lender can claim if the borrower defaults. An unsecured loan has no collateral and relies solely on the borrower's creditworthiness. Secured loans typically carry lower interest rates; unsecured loans carry more risk for the lender and usually have higher rates.

No. A promissory note is a simple written promise by the borrower to repay a specific amount under defined terms. A loan agreement is a more detailed bilateral contract covering both parties' rights and obligations - including default remedies, covenants, and representations. For larger or more complex loans, use a full loan agreement. A promissory note is sufficient for straightforward, smaller loans.

Yes, but you should document the interest rate clearly in a written loan agreement. In the US, the IRS requires a minimum interest rate (the Applicable Federal Rate) on loans above $10,000 between related parties - otherwise the IRS may impute interest as a taxable gift. Always check your local tax rules. A written loan agreement protects both parties and establishes the transaction as a loan, not a gift.

Default provisions vary by agreement, but typically the lender may: (1) declare the full outstanding balance immediately due and payable (acceleration clause), (2) charge default interest at a higher rate, (3) seize collateral if the loan is secured, or (4) pursue legal remedies including court judgment and wage garnishment. Your loan agreement should define what constitutes a default event and the remedies available.

Yes. All templates are jurisdiction-flexible by design. Download any template and edit it in Word or PDF, or create a free Legitt AI account and let Lana AI tailor the governing law, interest rate provisions, repayment schedule, and collateral terms in under 60 seconds - no manual editing required.