Templates of Loan Agreement Form

by ryan on May 4, 2017


Templates of Loan Agreement Forms


Traditional lending institutions like banks prepare sample loan agreement form to ensure that all the terms and conditions applicable to the loan that you are seeking are properly set out and that you as the borrower has the ability to comprehend them fully before signing up for the loan. This is generally a concise document often contained in a single page so that the borrower is not overwhelmed with too many conditions that he / she cannot comprehend fully.

This loan agreement form used by the traditional lenders or a similar one obtained from the internet can be conveniently used by most type of lenders. Often times, lending between close friends/family members is done without appropriate documentation. Interestingly, majority of defaults on repayment also occur in this category. In the absence of a legally enforceable document, the borrower inspite of having been a close friend or relative is emboldened to default because he/she knows pretty well that the lender cannot institute legal measures against him/her for collecting the loan. In such situations most lenders have the only option of foregoing the money over and above the prospect of potentially leaving a huge scar on the relationship.


Those who have the ability to lend money should also know that it is the borrower who is approaching them for the loan and chances are that most other options are closed to him/her either because they have a very poor credit score or cannot meet the conditions of a commercial lender. In such a situation, your being generous enough to extend a loan itself is a huge measure and therefore asking the borrower to sign up some papers should not cause any embarrassment. With a legally enforceable document in your hands, you are not just safeguarding your money, but your friendship/relationship is also more likely to remain undisturbed.

A loan agreement form is the best way to ensure that the document created while lending money is perfect in all respects. Legal language and structure is beyond the comprehension of most of us, and we do need some help from legal professional or other guide points such as these helpful websites which provide us with a wide range of useful formats and guidance.

Going one step beyond the loan agreement form itself, it is desirable that the lender and borrower acquaint themselves with the legal rights and duties under the agreement for each of them. Notice also that this type of agreements can be rescinded within the first 3 days from the date on which the agreement is executed. Obviously, the lender will not part with the funds during this period.






This provision is helpful to both the parties since any event impacting the agreement even after it is signed can be addressed effectively by rescinding the agreement. However, either party should communicate their intention to rescind the agreement in writing. In other words, any other form of communication will not be legally binding. State laws on financial transactions vary across the nation and therefore you can double check the provision depending on the loan agreement form you are considering.



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