What is a Personal Loan?
A personal loan is a type of unsecured loan that is typically granted for personal, family, or household purposes rather than for business or commercial use. Unlike secured loans, such as a mortgage or auto loan, a personal loan does not require collateral. Instead, lenders evaluate the borrower’s creditworthiness based on factors such as credit history, income, employment status, and other financial information.
Here are some key features of personal loans:
- Unsecured: As mentioned, personal loans are unsecured, meaning they don’t require any collateral. This makes them accessible to individuals who may not have assets to pledge as security.
- Fixed Amount: The borrower receives a fixed amount of money upfront, which is repaid over a predetermined period in regular installments.
- Fixed Interest Rate: Personal loans often come with a fixed interest rate, meaning the interest rate remains constant throughout the loan term. This makes it easier for borrowers to budget and plan for repayments.
- Term Length: The repayment period for personal loans varies but is typically between one to seven years. The term length is agreed upon at the time of loan approval.
- Purpose: Personal loans can be used for a variety of purposes, including debt consolidation, home improvement, medical expenses, education costs, and other personal expenses.
- Credit Check: Lenders usually conduct a credit check to assess the borrower’s creditworthiness before approving a personal loan. A good credit score can help in securing a lower interest rate.
- Quick Processing: Personal loans often have a quicker approval process compared to other types of loans, and the funds can be disbursed relatively quickly.
It’s important for borrowers to carefully consider the terms and conditions, including interest rates, fees, and repayment terms, before taking out a personal loan. Additionally, individuals should assess their own financial situation to ensure they can comfortably meet the repayment obligations.
Creating a personal loan agreement is a serious matter, and it’s highly recommended to consult with a legal professional to ensure that the document meets the specific legal requirements in your jurisdiction. Below is a simplified template for a personal loan agreement, but please be aware that this is a generic example and may not cover all legal considerations. Seek legal advice for your specific situation.
Personal Loan Agreement
This Personal Loan Agreement (“Agreement”) is entered into on [Date], by and between:
Lender: [Full Name] [Address] [City, State, ZIP Code]
Borrower: [Full Name] [Address] [City, State, ZIP Code]
Loan Details:
- Loan Amount: [Insert Loan Amount]
- Interest Rate: [Insert Interest Rate, if applicable]
- Loan Term: [Insert Loan Term in Months/Years]
- Repayment Schedule: [Specify Monthly/Quarterly/etc. Repayment Schedule]
- Late Payment Fee: [Specify Late Payment Fee, if applicable]
Terms and Conditions:
- Loan Purpose: The Borrower agrees to use the loan amount solely for [Specify Purpose].
- Interest: If applicable, interest shall be calculated on the outstanding principal balance at the rate specified above.
- Repayment: The Borrower agrees to repay the loan amount according to the specified repayment schedule. Payments shall be made to the Lender on or before the due date.
- Prepayment: The Borrower reserves the right to prepay the loan, in whole or in part, at any time without incurring any prepayment penalties.
- Late Payments: If the Borrower fails to make a payment on time, a late payment fee as specified above shall be charged.
- Default: If the Borrower defaults on the loan, the Lender may declare the entire outstanding balance immediately due and payable.
- Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [Specify Jurisdiction].
Signatures:
Lender: _____________________________ Date: ______________
Borrower: ___________________________ Date: ______________
Witness (optional):
_____________________________ Date: ______________
Before finalizing any personal loan agreement, it is strongly recommended to seek legal advice to ensure that the agreement complies with local laws and adequately protects both parties involved.
PERSONAL LOAN AGREEMENT SAMPLE
1. THE PARTIES. This Personal Loan Agreement (“Agreement”) made this [DATE] is between:
Borrower: [BORROWER’S NAME] with a mailing address of [ADDRESS] (“Borrower”), and agrees to borrow money from:
Lender: [LENDER’S NAME] with a mailing address of [ADDRESS], and agrees to lend money to the Borrower under the following terms:
2. LOAN AMOUNT. The total amount of money being borrowed from the Lender to the Borrower is $[AMOUNT] (“Borrowed Money”).
3. INTEREST RATE. The Borrowed Money shall: (check one)
? – Bear Interest. The Borrowed Money shall bear interest at a rate of [#]% compounded: (check one)
? – Annually ? – Monthly ? – Other: [OTHER]
? – NOT Bear Interest. There shall be no interest associated with the Borrowed Money. The Borrower’s only obligation to the Lender is to repay the principal balance.
4. TERM. The total amount of the Borrowed Money, including principal and interest, shall be due and payable on [DATE] (“Due Date”).
5. PAYMENTS. The Borrower agrees to repay the Borrowed Money to the Lender under the following payment schedule: (check one)
? – Weekly Payments. The Borrower agrees to repay the Lender on the [DAY] of each week until the Due Date. ? – Monthly Payments. The Borrower agrees to repay the Lender on the [DAY] of each month until the Due Date. ? – Lump Sum. The Borrower agrees to repay the Lender, in full, on the Due Date. ? – Other. [OTHER]
Hereinafter known as the “Payment Schedule.” All payments made by the Borrower shall be first applied to any accrued interest and second to the principal balance.
6. LATE PAYMENT. If the Borrower is late by more than [#] days for any payment due, it shall be considered late. If a payment is late, the Borrower shall be: (check one)
? – Charged a Late Fee. The Borrower shall be charged a late fee equal to: [LATE FEE AMOUNT]
? – Not Charged a Late Fee. The Borrower shall not be charged a late fee.
7. SECURITY. As part of this Agreement, the Borrower agrees to: (check one)
? – Pledge Security. The Borrower agrees to secure this Agreement by pledging the following collateral: [DESCRIBE] (“Security”).
In the event the Borrower defaults under this Agreement, the Lender shall obtain possession of the Collateral: (check one)
? – In its entirety and without discount to the amount owed. ? – Equal to the amount owed of which a sale may be required.
? – Not Pledge Security. This Agreement shall not be secured by any property or asset of the Borrower.
8. ACCELERATION. The Lender shall have the right to declare the Borrowed Money to be immediately due and payable, including interest owed, if any of the events are to occur:
a.) Late Payment. If any payment is late that is due under the Payment Schedule of more than 15 days; b.) Default. If the Borrower should default on any of the conditions of this Agreement; or c.) Security. If assets or property that are pledged as Security as part of this Agreement are transferred or sold.
9. SEVERABILITY. If any provision of this Agreement or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Agreement nor the application of the provision to other persons, entities, or circumstances shall be affected, thereby, but instead shall be enforced to the maximum extent permitted by law.
10. GOVERNING LAW. This Agreement shall be construed and governed by the laws located in the state of [GOVERNING LAW] (“Governing Law”).
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the day and year first above written.
Borrower’s Signature: _____________________ Date: _____________
Print Name: _____________________
Lender’s Signature: _____________________ Date: _____________
Print Name: _____________________
GUARANTOR ADDENDUM
The Guarantor, known as [GUARANTOR’S NAME], agrees to be liable and pay the Borrowed Amount, including principal and interest, in the event of the Debtor’s default. The Guarantor agrees to be personally liable under the terms and obligations of the Debtor in this Agreement.
Guarantor’s Signature: _____________________ Date: _____________
Print Name: _____________________
Loan Personal Guarantee Form Sample
PERSONAL GUARANTEE FORM
This Personal Guarantee (“Guarantee”) is entered into on [DATE], by and between:
Lender: [LENDER’S NAME] [ADDRESS] [CITY, STATE, ZIP CODE]
Borrower: [BORROWER’S NAME] [ADDRESS] [CITY, STATE, ZIP CODE]
Guarantor: [GUARANTOR’S NAME] [ADDRESS] [CITY, STATE, ZIP CODE]
Loan Details:
- Loan Agreement: This Guarantee is associated with a loan agreement dated [DATE] between the Lender and the Borrower.
- Loan Amount: The Borrower has received a loan in the amount of $[LOAN AMOUNT] from the Lender.
- Guarantee Amount: The Guarantor hereby unconditionally guarantees the full and prompt repayment of the Loan Amount, including any interest, fees, and charges that may accrue.
- Guarantee Period: This Guarantee shall remain in effect for the entire term of the loan and until the Borrower has fully satisfied all obligations under the Loan Agreement.
Terms and Conditions:
- Guarantor’s Obligations: The Guarantor agrees to be fully responsible for the repayment of the Loan Amount in the event of the Borrower’s default.
- Notification of Default: In the event of Borrower’s default, the Lender shall notify the Guarantor of such default, and the Guarantor shall have [NUMBER] days to cure the default or make arrangements to satisfy the outstanding obligations.
- Payment by Guarantor: If the Borrower fails to fulfill their obligations under the Loan Agreement, the Guarantor agrees to promptly pay the Lender the full outstanding amount due, including principal, interest, fees, and any other charges.
- No Waiver of Lender’s Rights: The Guarantor acknowledges that this Guarantee is in addition to, and not in substitution for, any other security or guarantee the Lender may hold.
- Continuing Guarantee: This Guarantee is a continuing and irrevocable obligation and shall remain in full force and effect until all of the Borrower’s obligations under the Loan Agreement are fully satisfied.
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower: _____________________________ Date: ______________
Print Name: _____________________________
Guarantor: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO GUARANTOR: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. THIS GUARANTEE INVOLVES SIGNIFICANT FINANCIAL RISK. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Guarantor acknowledges and agrees to the terms and conditions of this Personal Guarantee.
Guarantor’s Signature: _____________________ Date: _____________
Print Name: _____________________
Loan Extension Agreement Template
LOAN EXTENSION AGREEMENT
This Loan Extension Agreement (“Agreement”) is entered into on [DATE], by and between:
Lender: [LENDER’S NAME] [ADDRESS] [CITY, STATE, ZIP CODE]
Borrower: [BORROWER’S NAME] [ADDRESS] [CITY, STATE, ZIP CODE]
Loan Details:
- Original Loan Agreement: This Agreement refers to the original loan agreement dated [DATE], between the Lender and the Borrower.
- Original Loan Amount: The original loan amount was $[ORIGINAL LOAN AMOUNT].
- Extended Loan Amount: The Borrower has requested an extension of the loan in the amount of $[EXTENDED LOAN AMOUNT].
- Extension Period: The extension period shall be for [NUMBER] months, commencing from [NEW DUE DATE].
Terms and Conditions:
- Extension Request: The Borrower hereby requests an extension of the loan and agrees to the terms outlined in this Agreement.
- Extended Terms: The Borrower and the Lender agree to extend the loan term, and the Borrower agrees to repay the extended loan amount in accordance with the terms of this Agreement.
- Interest and Fees: The interest rate and fees applicable to the extended loan amount shall be the same as outlined in the original loan agreement.
- Repayment Schedule: The Borrower shall make payments on the extended loan amount in accordance with the repayment schedule outlined in the original loan agreement.
- Due Date: The extended loan amount, along with any accrued interest and fees, shall be due and payable on [NEW DUE DATE].
- Late Payments: Late payments on the extended loan amount may result in additional fees and charges as specified in the original loan agreement.
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO BORROWER: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. THIS LOAN EXTENSION INVOLVES ADDITIONAL FINANCIAL OBLIGATIONS. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Borrower acknowledges and agrees to the terms and conditions of this Loan Extension Agreement.
Borrower’s Signature: _____________________ Date: _____________
Print Name: _____________________
Family Loan Agreement Template
FAMILY LOAN AGREEMENT
This Family Loan Agreement (“Agreement”) is entered into on [DATE], by and between:
Lender: [Lender’s Full Name] [Address] [City, State, ZIP Code]
Borrower: [Borrower’s Full Name] [Address] [City, State, ZIP Code]
Loan Details:
- Loan Amount: The total amount of money being loaned by the Lender to the Borrower is $[LOAN AMOUNT].
- Interest Rate: This loan will [check one]:
- ? Be interest-free.
- ? Bear interest at a rate of [INTEREST RATE]% per annum.
- Loan Purpose: The Borrower agrees to use the loan for [SPECIFY LOAN PURPOSE].
- Repayment Terms:
- Installments: The Borrower agrees to repay the loan in [NUMBER] equal installments.
- Due Date: Each installment payment is due on the [DAY] of every [MONTH/WEEK].
- Late Payment: If any payment is not made within [NUMBER] days of the due date, the Borrower agrees to pay a late fee of $[LATE FEE AMOUNT].
- Prepayment: The Borrower reserves the right to prepay the outstanding balance at any time without incurring any prepayment penalties.
Terms and Conditions:
- Loan Agreement: Both parties agree that this loan is a personal arrangement and will not involve any third-party intermediaries.
- Documentation: The Lender and Borrower agree to keep proper records of all transactions related to this loan, including receipts and statements.
- Modification: Any changes to the terms of this agreement must be made in writing and agreed upon by both parties.
- Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [STATE].
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO BORROWER: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Borrower acknowledges and agrees to the terms and conditions of this Family Loan Agreement.
Borrower’s Signature: _____________________ Date: _____________
Print Name: _____________________
Release of Personal Guarantee
RELEASE OF PERSONAL GUARANTEE
This Release of Personal Guarantee (“Release”) is entered into on [DATE], by and between:
Lender: [Lender’s Full Name] [Address] [City, State, ZIP Code]
Borrower/Guarantor: [Borrower/Guarantor’s Full Name] [Address] [City, State, ZIP Code]
Loan Details:
- Original Loan Agreement: This Release pertains to the personal guarantee provided by the Borrower/Guarantor in connection with the loan agreement dated [DATE], between the Lender and the Borrower.
- Guarantee Amount: The Borrower/Guarantor originally guaranteed the repayment of the loan amount of $[ORIGINAL LOAN AMOUNT].
Release Terms:
- Full Repayment: The Borrower has fully satisfied and repaid the entire outstanding loan amount, including any accrued interest, fees, and charges.
- Release of Guarantee: In consideration of the Borrower’s full repayment and satisfaction of all obligations under the original loan agreement, the Lender hereby releases and discharges the Borrower/Guarantor from any and all liabilities, claims, or obligations arising out of the personal guarantee.
- No Further Obligations: The Lender acknowledges that the Borrower/Guarantor has fulfilled all commitments under the personal guarantee, and no further action is required from the Borrower/Guarantor in connection with the original loan agreement.
- Notice to Relevant Parties: The Lender agrees to promptly notify any relevant parties, institutions, or credit bureaus of the release of the personal guarantee.
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower/Guarantor: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO BORROWER/GUARANTOR: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Borrower/Guarantor acknowledges and agrees to the terms and conditions of this Release of Personal Guarantee.
Borrower/Guarantor’s Signature: _____________________ Date: _____________
Print Name: _____________________
Promissory Note Template
PROMISSORY NOTE
This Promissory Note (“Note”) is made and entered into on [DATE], by and between:
Lender: [Lender’s Full Name] [Address] [City, State, ZIP Code]
Borrower: [Borrower’s Full Name] [Address] [City, State, ZIP Code]
Loan Details:
- Loan Amount: The Borrower promises to pay the Lender the principal sum of $[LOAN AMOUNT].
- Interest Rate: This loan will [check one]:
- ? Be interest-free.
- ? Bear interest at a rate of [INTEREST RATE]% per annum.
- Loan Purpose: The Borrower agrees to use the loan for [SPECIFY LOAN PURPOSE].
- Repayment Terms:
- Installments: The Borrower agrees to repay the loan in [NUMBER] equal installments.
- Due Date: Each installment payment is due on the [DAY] of every [MONTH/WEEK].
- Late Payment: If any payment is not made within [NUMBER] days of the due date, the Borrower agrees to pay a late fee of $[LATE FEE AMOUNT].
- Prepayment: The Borrower reserves the right to prepay the outstanding balance at any time without incurring any prepayment penalties.
Terms and Conditions:
- Promissory Note Security: This Note is a personal obligation of the Borrower and is not secured by any collateral.
- Documentation: Both parties agree to keep proper records of all transactions related to this loan, including receipts and statements.
- Modification: Any changes to the terms of this Note must be made in writing and agreed upon by both parties.
- Governing Law: This Note shall be governed by and construed in accordance with the laws of [STATE].
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO BORROWER: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Borrower acknowledges and agrees to the terms and conditions of this Promissory Note.
Borrower’s Signature: _____________________ Date: _____________
Print Name: _____________________
Promissory Note (Loan) Release Form
PROMISSORY NOTE RELEASE FORM
This Promissory Note Release Form (“Release Form”) is made and entered into on [DATE], by and between:
Lender: [Lender’s Full Name] [Address] [City, State, ZIP Code]
Borrower: [Borrower’s Full Name] [Address] [City, State, ZIP Code]
Promissory Note Details:
- Original Promissory Note: This Release Form pertains to the promissory note dated [DATE], executed by the Borrower in favor of the Lender.
- Loan Amount: The original loan amount was $[LOAN AMOUNT].
- Remaining Balance: The Borrower has made payments totaling $[TOTAL PAYMENTS MADE], leaving a remaining balance of $[REMAINING BALANCE].
Release Terms:
- Full Repayment: The Borrower has fully satisfied and repaid the entire outstanding balance of the promissory note, including any accrued interest, fees, and charges.
- Release of Liability: In consideration of the Borrower’s full repayment and satisfaction of all obligations under the promissory note, the Lender hereby releases and discharges the Borrower from any and all liabilities, claims, or obligations arising out of the promissory note.
- No Further Obligations: The Lender acknowledges that the Borrower has fulfilled all commitments under the promissory note, and no further action is required from the Borrower in connection with the original loan.
- Notice to Relevant Parties: The Lender agrees to promptly notify any relevant parties, institutions, or credit bureaus of the release of the promissory note.
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO BORROWER: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Borrower acknowledges and agrees to the terms and conditions of this Promissory Note Release Form.
Borrower’s Signature: _____________________ Date: _____________
Print Name: _____________________
Small Business Loan Agreement
SMALL BUSINESS LOAN AGREEMENT
This Small Business Loan Agreement (“Agreement”) is entered into on [DATE], by and between:
Lender: [Lender’s Full Name] [Address] [City, State, ZIP Code]
Borrower: [Borrower’s Business Name] [Business Address] [City, State, ZIP Code]
Loan Details:
- Loan Amount: The total amount of money being loaned by the Lender to the Borrower is $[LOAN AMOUNT].
- Interest Rate: This loan will [check one]:
- ? Be interest-free.
- ? Bear interest at a rate of [INTEREST RATE]% per annum.
- Loan Purpose: The Borrower agrees to use the loan for [SPECIFY LOAN PURPOSE].
- Repayment Terms:
- Installments: The Borrower agrees to repay the loan in [NUMBER] equal installments.
- Due Date: Each installment payment is due on the [DAY] of every [MONTH/WEEK].
- Late Payment: If any payment is not made within [NUMBER] days of the due date, the Borrower agrees to pay a late fee of $[LATE FEE AMOUNT].
- Prepayment: The Borrower reserves the right to prepay the outstanding balance at any time without incurring any prepayment penalties.
Terms and Conditions:
- Promissory Note Security: This Agreement may be secured by [SPECIFY COLLATERAL, IF ANY].
- Business Representations: The Borrower represents that it is a legally recognized business entity and has the authority to enter into this Agreement.
- Documentation: Both parties agree to keep proper records of all transactions related to this loan, including receipts and statements.
- Default: The Borrower shall be considered in default if any payment is not made within [NUMBER] days of the due date, or if there is a breach of any other terms outlined in this Agreement.
- Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [STATE].
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO BORROWER: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Borrower acknowledges and agrees to the terms and conditions of this Small Business Loan Agreement.
Borrower’s Signature: _____________________ Date: _____________
Print Name: _____________________
Loan Extension Agreement Template
LOAN EXTENSION AGREEMENT
This Loan Extension Agreement (“Agreement”) is entered into on [DATE], by and between:
Lender: [Lender’s Full Name] [Address] [City, State, ZIP Code]
Borrower: [Borrower’s Full Name] [Address] [City, State, ZIP Code]
Loan Details:
- Original Loan Agreement: This Agreement refers to the original loan agreement dated [ORIGINAL LOAN AGREEMENT DATE], between the Lender and the Borrower.
- Original Loan Amount: The original loan amount was $[ORIGINAL LOAN AMOUNT].
- Extended Loan Amount: The Borrower has requested an extension of the loan, and the Lender agrees to extend an additional amount of $[EXTENDED LOAN AMOUNT].
- Extension Period: The extension period shall be for [NUMBER] months, commencing from [ORIGINAL DUE DATE].
Terms and Conditions:
- Extension Request: The Borrower hereby requests an extension of the original loan and agrees to the terms outlined in this Agreement.
- Extended Terms: The Borrower and the Lender agree to extend the loan term, and the Borrower agrees to repay the extended loan amount in accordance with the terms of this Agreement.
- Interest and Fees: The interest rate and fees applicable to the extended loan amount shall be the same as outlined in the original loan agreement.
- Repayment Schedule: The Borrower shall make payments on the extended loan amount in accordance with the repayment schedule outlined in the original loan agreement.
- Due Date: The extended loan amount, along with any accrued interest and fees, shall be due and payable on [NEW DUE DATE].
- Late Payments: Late payments on the extended loan amount may result in additional fees and charges as specified in the original loan agreement.
Signatures:
Lender: _____________________________ Date: ______________
Print Name: _____________________________
Borrower: _____________________________ Date: ______________
Print Name: _____________________________
NOTICE TO BORROWER: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. IF YOU DO NOT FULLY UNDERSTAND THE TERMS, SEEK INDEPENDENT LEGAL ADVICE.
By signing below, the Borrower acknowledges and agrees to the terms and conditions of this Loan Extension Agreement.
Borrower’s Signature: _____________________ Date: _____________
Print Name: _____________________