Use our loan agreement template to detail the terms of a loan. A loan agreement is a legally binding contract between a lender and a borrower that a court can enforce if one party doesn’t follow the arrangement. It establishes the amount the lender is lending and sets other terms, including the repayment schedule and interest.

Download our free payment agreement template in PDF or Word format below: Provides clarity and structure: It gives explicit instructions on how and when the borrower should make payments. It also minimizes misunderstandings and outlines the consequences of defaulting.

Description of loan: The loan agreement, first and foremost, must include the amount of money being loaned, as well as whether the borrower will be required to pay interest on the loan. If the borrower must pay interest on the loan, the agreement includes the interest rate being charged.

A loan agreement is a legally binding contract between a lender and a borrower that a court can enforce if one party doesn’t follow the arrangement. It establishes the amount the lender is lending and sets other terms, including the repayment schedule and interest. Use a written loan agreement whenever you lend or borrow money.