Sample Of Loan Agreement Between Two Parties

All of us of course want to avoid for borrowing something as possible as we can. Yet, when it is a must because of the condition, we have to do it. Well, when having a loan agreement is only a way to help your problem and make the situation clearer, then it is good when you make an agreement between two parties. It is because you can make the agreement as proof. It will give several benefits for both of you as borrower and lender.

How To Write A Loan Agreement Between Two Parties

First of all, a loan agreement between two parties is a contract between anyone. It can be an individual as lender and borrower or may be one group to another group. Of course there is not always about money, there are mainly revolvers, term loans, working capital loans, or even facilities agreement. However, most of the loan could be for money.
Next, there are some tips for writing loan agreement between two parties below:

  • Make sure that the purpose of the loan agreement is easy to understand. Because the loan agreement is illegal document, all people who signed the contract should understand the purpose of the letter.
  • Whether you are a borrower or lander, do some confirmation like about the personal data and address including phone number or even e-mail. If you do not understand or even feel that the agreement is not correct, never signs it.
  • Well since this contract is a loan agreement between two parties, both of them need discuss. Make sure that you understand the contract well. It is okay when you want to discuss about the payment and loan before both of you make a deal.

It does not matter whether you are a lander or borrower, you need to be careful. Sometimes, every people will do anything especially when they need money like more than anyone else. The first thing you should write is about the suitable tittle. Write it at top on the letter and make it bold. As the lander, you need to make sure whether you know the party or not. 
You need to identify the borrower and you need some information including contact details address, amount correctly. The other points when you want to make a requesting sample of loan agreement. You should understand that there is also amount and rate of interest as well. Then the last also insert late fees and prepayment clause. Finally, let see the example below:

Loan Agreement Letter Example


Loan Amount___________ Dollars ($____________)
Date _____________, 20_____


For the above value received by ___________________________ with a mailing address of __________________________, City of ___________________________, State of ________________________, (the “Borrower”), agrees to pay ______________, City of __________________________, State of _______________________, (the “Lender”).


This agreement, (the “Note”), shall be due and payable, including the principal and any accrued interest, in one of the following ways:
Once per week beginning on ______________, 20____ and to continue every seven (7) days until the balance is paid.
Once per month beginning on ______________, 20____ and payment is due on the ___ of month until the balance is paid.
All payments made by the Borrower are to be applied first (1st) to any accrued interest and then to the principal balance. The total amount of the loan shall be due and payable on the ___ day of ___________________, 20____.


The Note shall
Bear interest at a rate of _______________________ percent (______%) compounded annually. The rate must be equal to or less than the usury rate in the State of the Borrower.
Not bear interest.


The Borrower has the right to pay back the loan in-full or make additional payments at any time without penalty.

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