Loan Agreement PDF Template

Any time you enter into a loan agreement, you should make sure you have a contract or agreement which is enforceable in a court of law. By including the right provisions, you can complete a correct, fair, and binding legal agreement, ensuring that your loan is paid back on time.

Set the rules, privileges, and limitations for your loan agreement by writing them down and making them binding with a signature from your borrower. Make sure that the borrower follows the rules by clearly outlining them, and including restrictions and penalties for not following through on payments.

You’ll need to do all of the proper research and homework first, but this template will give you a head-start and a good framework. You should always consult a lawyer though before finalizing any contracts.

Download the template today and edit it using any version of our PDF Reader apps.

Make a loan agreement and ensure that the person who owes you money pays on time and that you agree upon the terms for the transaction. Loans often have interest, many payments over time, and provisions for what happens in case of late payment, default, or some other issue that causes the money not to be repaid. When a loan is not repaid, the lender has information for the borrower which can be applied to the borrower’s credit score, and in addition, the lender can use collections companies to get back the money they are owed.

Depending on the amount of risk involved in the transaction, you as a lender might be willing to offer lower interest rates to the borrower. If the borrower is relatively low risk, the interest rate might be low, and if the borrower has a low credit score or is otherwise higher risk, you might charge a higher interest rate, or even deny the loan.

Most loans are subject to a loan application. The loan application is another document where the prospective borrower must answer a questionnaire, and include information about their financial history. The lender then must analyze this information, along with publicly available data such as credit scores. Applicants usually must include their highly confidential information, such as their social security information and their other identification data, so that the lending company can verify their identity across multiple online databases like Intelius. We’ve included a privacy policy section as well, which you can use to assure your clients that you won’t share their confidential data. If the applicant passes the questionnaire, then they might become a borrower. Depending on their specific answers, or depending on responses from electronic systems, like FICO or Experian credit scores, the terms for the lending contract may vary. Companies usually establish very complex score criteria for these applications, and adjust the amounts for interest and payments accordingly.

Lending companies make money from compound interest. If they sell a loan to someone, then the interest is the part that gives the lending company money. Generally, the longer the loan, the higher the interest payment must be. Many loans are front-loaded with interest. The borrower must pay the interest up-front, and then pay the remainder, including the “principal”, later on. All of these stipulations about the term of the loan, and how the payments are structured, should be included in the loan agreement.

The loan agreement must include specific provisions or paragraphs in the agreement that apply to a loan, such as the term, number of payments, payment frequency, and interest rate, or other structural considerations. Aside from these sections, the loan agreement looks very much like any other contract. Keep in mind that depending on the locality of the agreement, you may need to establish certain provisions, which might be required per local legislation and statutes. A city, state, province, county, or other municipality might enforce specific rules as to what language must be included in the loan agreement.

A common provision for example which helps to reinforce the idea of fairness in your agreement, and to reduce the chance of the agreement being thrown out or dismissed in court, is the provision of the “cool-off” period. The cool-off period might allow a borrower to return the loan in its entirety, or cancel the contract. This cool-off period might be required by law, or it might be introduced as a result of precedent. For example, when your company is sued by a borrower, if your contract doesn’t include a cool-off period, or doesn’t mention that there is no cool-off period, the judge might be liable to dismiss the contract.

Because the loan agreement is a type of financial agreement, the particular cases or conditions that might happen in any case of a financial transaction should be discussed. If the agreement is found in default, for example, there must be some pre-defined actions, schedule, notices, or other important terms that come into effect. Defining these in the contract allows the parties to act unilaterally, complying by the written instructions and prescriptions in the contract.

We’re including in this template all of the majority of important paragraphs and terms. Many of them are selectable. This selection or “election” box allows you or your lawyer to pick and choose elements of the agreement to use. While some elements may be struck from the contract, others can easily be enacted into force by checking or initialing. Overall, we’ve engineered this agreement to include as many form-fillable elements as possible. You can print and fill easily, or digitally fill out with PDF reader, and collaborate with your clients with full legally binding eSignatures, supported by DottedSign.

Whether you are building a business based on the issuance of loan agreements, or you are only issuing a single loan, this loan agreement template is enough to get you started. It’s designed with concise, easy-to-read language, and written with versatility in mind. See how easy it is to create your first legally binding, fully electronic PDF-based, enforceable loan agreement today.