It is simply a nature of businesses to seek financial help for capital, improvements, acquisition, and a host of other reasons. Regardless, as a business owner, you must have encountered some form of loan agreements or in need of one that’s why you are here.
Loan agreements are binding contracts between a borrower and a lender to formalize a loan process and regulated the mutual promises made by each other. Here, we have curated some simple loan Agreement Templates that you can download and use.
Simple Business Loan Agreement
Simple Personal Loan Agreement
Simple Car Loan Agreement Template
Simple Employee Loan Agreement Template
Purposes of a Loan Agreement
Just like any other contracts, such as Rental Agreement Forms and Confidentiality Agreement Forms, loan agreements have various purposes aside from is main purpose of being a formal document defining what both parties have agreed upon. Here are some of them:
- Protection. A loan agreement should always comply with the law and regulations of the state it made under to protect both the lender and borrower should either of them fail to adhere to the stated terms and conditions of the agreement.
- Commitment. The signed loan contract should have a clear definition of what particular purpose the amount being loaned is for. The borrower should commit to this specific purpose, how the loan will be paid back, and its interest rate; otherwise, the money should be paid back to the lender immediately.
- Prevention. Borrowing money requires huge responsibility, and that is why a formal process should take place, especially when loaning to a family member or friend. A loan agreement prevents arguments over the terms and conditions and produces positive results on both sides.
- Clarity. A loan agreement should always indicate how the loan will be paid off over time, the exact monthly payment due, and how much interest is involved in each payment. It will also help track the payments made within the duration of the time being agreed upon.
Simple Internal Loan Agreement Template
Simple Loan Consumer Agreement
Free Simple Loan Agreement Template
Simple Convertible Loan Agreement
Legal Terms to Consider
It is just as essential to have an understanding of your financial arrangements as understanding your business needs. Below are some of the standard legal terms you need to know before signing a loan agreement:
- Choice of Law. Every state or country may govern some laws that are different or nonexistent in other areas; therefore, it is important to identify which laws are applicable or not in your jurisdiction.
- Involved Parties. Each of the borrower and lender’s personal information such as names, addresses, social security numbers, and contact details should be clearly stated in the loan agreement.
- Severability Clause. This clause indicates that the terms and conditions stated in the contract are independent of each other. This means that each one of the conditions can either be or not enforceable by a court.
- Entire Agreement Clause. This term describes the final say and the conclusive agreement that takes over from any other previous agreements made during negotiations, whether written or oral.
Do not forget to check out our Free Non Disclosure Agreement Form and other agreement forms templates available on our website for your every form needs.