Loan Agreement Template
A loan agreement is a contract by which one party (Lender) lends money to another (Borrower). Either parties may be individual, registered businesses, corporations or partnerships.
Lender: party who provides the funds
Borrower: party who requires the funds
Guarantor: individual or corporation agreeing to perform the Borrower’s obligations if he fails to do so (if required)
Witness: attests that the parties duly signed this Agreement
When to use This Loan Agreement Template ?
When a party considers lending money to another.
Please collect the following information before completing this form:
- general terms of repayment
if repayments terms are to be set out in this Agreement (and not in a separate Promissory Note), please determine the following:
– period of time over which the loan will be repaid
– the amount of each installment
– where the payments will be remitted
– the interest rate that will be charged
- ability to prepay loan with or without a penalty
- determine whether a security is required for this loan
- determine whether a Guarantor is required
Specifications of this Loan Agreement Template
In this agreement, you can:
- Determine the methods of repayment which could be as set in a separate Promissory Note or in equal payments in installments over a certain period of time.
a) If the repayment terms are set out in the Promissory Note, such Note should be attached to this Loan Agreement as Exhibit “A”
- Include an annual interest to accrue on the loan amount
- Include a provision by which the Borrower may prepay the loan before the due date. Such prepayments could be made:
a) At any time without any penalty;
b) At any time with a penalty;
c) After a certain period of time without any penalty; or
d) After a certain period of time with a penalty.
The penalties in such prepayments could be a flat rate or a percentage of the prepayment amount.
- Include a provision by which Borrower would provide a security for the loan. If the Lender registers this security with the governmental registrar, the Lender could have priority over any other creditors who do not register such securities.
a) Include copies of the securities granted as Exhibit “B” to the Loan Agreement.
- Include a provision for a Guarantor. You can cap the liability for which the Guarantor will be liable for at a certain amount.
- Choose the laws of which state or province should apply to this Agreement.
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