A Private Loan Agreement is a legal document that establishes the terms and conditions under which one party (the lender) provides money to another party (the borrower) with an obligation to repay the principal amount plus any agreed interest. This advocate-reviewed template is available for download on wansom.ai and can be adapted to various jurisdictions, though users should verify compliance with local lending laws, usury regulations, and contract requirements in their specific location.
This downloadable template is intended for individual lenders, borrowers, family members lending to relatives, friends providing financial assistance, private investors, small business owners, entrepreneurs seeking funding, and advocates handling loan documentation. A properly drafted loan agreement protects both parties by clearly defining repayment obligations, interest rates, payment schedules, and consequences of default, helping to prevent disputes and misunderstandings.
The template includes provisions for specifying the loan amount and disbursement method, setting the interest rate (fixed or variable) and calculation method, establishing a repayment schedule with due dates and installment amounts, defining late payment penalties and default conditions, and outlining security or collateral if applicable. The document also covers prepayment options, rights and responsibilities of both parties, governing law and dispute resolution mechanisms, and remedies available in case of breach. Key elements include clear identification of both lender and borrower, loan purpose if restricted, term or duration of the loan, total amount payable including interest, and consequences of non-payment, such as acceleration clauses or legal action.
This legally compliant, ready-to-use template helps formalize personal and business loans, ensuring proper documentation that can be enforced in court if necessary while maintaining transparency and protecting the financial interests of both the lender and borrower throughout the loan period.