Lending money to people you know is easier when expectations are written down. A short agreement protects both the money and the relationship.
Free Personal Loan Agreement template
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Personal Loan Agreement
This Agreement is between ____ ("Lender") and ____ ("Borrower").
1. Loan
Lender agrees to lend Borrower $____ for ____. Borrower acknowledges receiving the funds.
2. Interest
The loan bears interest at ____% per year on the unpaid balance.
3. Repayment
Borrower will repay the loan as follows: ____, beginning ____, by ____. Borrower may repay early without penalty.
4. Default
If a payment is more than 30 days late, Lender may give written notice and require the remaining balance to be paid in full.
5. Entire agreement
This is the entire agreement between the parties, governed by the laws of ____. Changes must be in writing and signed by both parties.
Lender: __ Date: __
Borrower: __ Date: __
This free template is general information, not legal advice, and may not suit your state or situation. Some documents must be signed before witnesses or a notary. For anything important, have a lawyer review it.
Tips for family loans
- Decide whether it’s a loan or a gift, and write it down.
- Agree a realistic repayment plan.
- Keep a record of every payment.
Taxes
Large interest-free loans can have tax implications. A tax professional can advise.
Frequently asked questions
Can I charge interest to a family member?
Yes, within your state’s usury limits. Many families choose a low or zero rate.
Questions from readers
Question about the Personal Loan Agreement? Ask it here. We answer common questions in general terms on this page. This is not legal advice.
