Loan Agreement Template

What Is the Loan Agreement Template?

This loan agreement template establishes the complete terms for lending money between two parties. It covers principal amount, interest calculation, repayment schedule, collateral requirements, financial covenants, default remedies, and optional personal guarantees. The template works for both secured and unsecured loans.

Unlike a simple promissory note, this agreement includes comprehensive protections like negative covenants that prevent borrowers from taking actions that jeopardize repayment, financial reporting requirements that give you early warning of problems, and detailed default provisions that specify exactly what happens when payments stop. You get the same sophistication that banks use for commercial lending.

 

 

Is This Loan Agreement Template Right for You?

You need this agreement if you're:

• Lending money to family members or friends
• Providing working capital loans to small businesses
• Financing equipment or vehicle purchases
• Making bridge loans secured by real property
• Offering seller financing for business sales
• Extending credit lines to contractors or vendors

You definitely need this agreement if:

• You're lending more than $5,000 to anyone
• The borrower has asked for unsecured credit
• You want rights to collateral if payments stop
• The borrower operates as an LLC or corporation
• Repayment depends on business cash flow

 

 

Why Thousands Trust Legal GPS Templates

Save Money: Attorneys charge $1,500-3,500 to draft loan agreements. This template costs $35.

Save Time: Complete your agreement in 30-45 minutes instead of waiting weeks for attorney drafts and revisions.

Look Professional: Banks and courts recognize this structure. Your borrower takes it seriously because it reads like attorney work.

Keeps You Out of Court: The Events of Default article defines 11 specific triggers beyond non-payment. The Remedies Upon Default article gives you acceleration rights, security interest enforcement, and cost recovery. When borrowers know exactly what happens if they default, most find a way to stay current.

 

 

 

Get Protected in 3 Simple Steps

Step 1: Secure Checkout

Purchase securely using our encrypted payment system. You'll receive instant access to your template via email and your Legal GPS account.

Step 2: Instant Download

Download your template immediately as an editable Word document. The template comes with bracketed guidance and multiple choice options built directly into the agreement.

Step 3: Fill In the Highlighted Fields

Complete the customization fields throughout the document. Make your choices between provided options based on your specific lending situation. Save as PDF and get signatures.

 

Frequently Asked Questions

Can I use this template multiple times?

Yes. Your purchase includes unlimited use rights. You can use this template for every loan you make without additional fees or licenses.

Is this contract legally binding?

Yes. This is a legally enforceable contract when properly completed and signed by both parties. Courts and financial institutions recognize this structure. The agreement includes standard enforceability provisions like severability, governing law, and dispute resolution clauses.

What's the difference between this and a promissory note?

Promissory notes are simpler documents focused on payment obligations. This loan agreement includes comprehensive provisions like financial covenants, negative covenants, security interests, default remedies, and personal guarantees. Use this template when you need more protection than a basic promissory note provides.

Can I make this a secured loan with collateral?

Yes. The template includes full security agreement provisions. You can specify collateral, file UCC-1 financing statements, and enforce security interests. The template covers insurance requirements, collateral maintenance obligations, and procedures for taking possession after default.

Do I need to notarize this agreement?

Notarization is not required for the loan agreement to be legally binding. However, if you're taking real estate as collateral, the related mortgage or deed of trust will require notarization. For personal property collateral, notarization is optional but can strengthen enforceability.

Can I charge whatever interest rate I want?

No. Every state has usury laws that cap maximum interest rates. The template includes a usury savings clause that automatically reduces any payment exceeding your state's maximum. Check your state's specific limits before setting your interest rate. Most states cap consumer loans at 18-25% and business loans higher or have no cap.