A Simple Loan Agreement Template for Lending Money (2026)

What a loan agreement is A loan agreement, sometimes called a loan contract, a promissory note, or a cash borrowing agreement, is a written record that one person or business lent money to another and the borrower agreed to pay it back. It sets out how much, by when, with or without interest, and what happens if the borrower does not pay. People use one when lending to family, friends, a colleague, or a business, and it is just as useful for a small personal loan as for a larger one. Writing it down does two things. It removes the memory problem, because a figure on paper beats two different recollections six months later. And it gives you something to rely on if you ever have to recover the money. This page is general information, not legal advice. Interest rate caps, usury rules, and formalities vary by country and state, so confirm your local position. ## A simple loan agreement template you can copy ```

LOAN AGREEMENT This Loan Agreement is made on [date] BETWEEN Lender: [name], of [address] AND Borrower: [name], of [address] 1. LOAN AMOUNT The Lender lends the Borrower [amount in figures and words] (the "Loan"), paid by [bank transfer / other] on [date]. 2. INTEREST [Option A: The Loan carries no interest.] [Option B: The Loan carries interest at [rate]% per year on the amount outstanding, which must be within any legal limit, check your local rate.] 3. REPAYMENT The Borrower will repay the Loan by [choose one]:

• a single payment of [amount] on [date]; or
• [number] monthly instalments of [amount] starting on [date], until the Loan and any interest are paid in full. 4. EARLY REPAYMENT The Borrower may repay early, in whole or in part, without penalty. 5. LATE PAYMENT If a payment is more than [number] days late, [state the consequence, for example interest continues to run, or a late fee within the legal limit applies]. 6. DEFAULT If the Borrower misses [number] payments or breaches this agreement, the whole outstanding balance becomes due at once on the Lender's written demand. 7. SECURITY [Option A: This Loan is unsecured.] [Option B: The Loan is secured against [describe the asset], and the security documents are attached.] 8. COSTS Reasonable costs of recovering an unpaid Loan are payable by the Borrower, to the extent the law allows. 9. GOVERNING LAW This agreement is governed by the law of [place]. SIGNED Lender __________ Borrower __________ Witness __________ Witness __________

- No repayment dates, so the borrower is never technically late.
- Charging interest above the legal cap, which can backfire on the lender.
- No default or acceleration clause, so one missed payment gives you no clear remedy.
- Forgetting witnesses or signatures where local formality rules expect them. ## How jurisdiction changes things The written-promise idea is universal, but the detail is local. In the United States, interest caps and consumer lending rules vary by state, and lending as a business is heavily regulated. In the United Kingdom, consumer credit is regulated, and lending to consumers in the course of business may require authorisation. In India, loans between individuals are governed by contract law, and interest may be affected by state money-lending rules. If you lend as a business rather than as a one-off favour, the rules tighten sharply, so confirm your position first. ## Keeping loans on the record Even a single loan generates more than one record: the agreement, the proof the money moved, the repayment schedule, and any reminders when payments slip. Each has a date, and when you make more than one loan, or lend inside a business, keeping them straight becomes real work. The job is drafting a clear agreement, catching an unenforceable interest or penalty term before you sign, and tracking repayments and due dates so nothing is missed. That is the same problem businesses face across all their contracts, which is why drafting, understanding, editing, tracking, and governing a document like this can live in one AI workspace tuned to how your company contracts and built on Claude, with transparent per-seat pricing. [Adira](https://adiralaw.com) is built around that single-workspace idea for business contracts. For a one-off personal loan, the template above plus a check of your local interest limits is enough.