financial-agreements
Personal Loan Contract Template: Interest & Repayment
Use our free Personal Loan Contract template to clearly document a personal loan between individuals or small businesses, including amount, interest, repayment terms, and default provisions. Customize, download, and print in minutes.
PERSONAL LOAN CONTRACT TEMPLATE FAQ
What is a personal loan contract?
A personal loan contract is a written agreement where one person or business (the lender) lends money to another person or business (the borrower) and both agree on key terms such as the loan amount, interest rate (if any), repayment schedule, and consequences of non-payment. It turns an informal promise into a clear, documented arrangement.
When should I use a personal loan contract?
Use a personal loan contract whenever you lend or borrow money outside of a bank or large financial institution — for example, loans between friends, relatives, business partners, or small businesses — especially when you want to avoid misunderstandings and have a clear written record of the deal.
What should be included in a personal loan contract?
A clear personal loan contract usually includes: names and contact details of lender and borrower, the loan amount and currency, how and when the money will be disbursed, interest rate and calculation method, repayment schedule, late payment and default rules, whether the loan is secured or unsecured, governing law, and signatures.
Does a personal loan contract have to charge interest or be secured?
No. A personal loan can be interest-free and unsecured if both parties agree. However, some lenders choose to charge interest and/or require collateral for larger or higher-risk loans. This template allows you to set the interest rate (including 0%) and to indicate whether the loan is secured or unsecured.
Is a personal loan contract legally binding?
A properly drafted and signed personal loan contract can be legally binding if it meets basic contract requirements in your jurisdiction, such as offer, acceptance, consideration, and capacity. It does not guarantee collection, but it gives much stronger evidence of the agreed terms than a verbal promise alone. For significant amounts, you may want a professional review.
Can AI Lawyer help me customize this Personal Loan Contract?
Yes. AI Lawyer can help you adapt this Personal Loan Contract with your names, loan amount, interest rate, repayment plan, and any security terms so you have a clear, organized document ready to review, print, and sign.