Free Loan Agreement

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Free Loan Agreement

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  2. Email, download or print instantly
  3. Just takes 5 minutes

Loan Agreement

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Personal lending
Real estate
Business
Vehicle
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Your Loan Agreement

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LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement")

BETWEEN:


__________ of ______________________________________
(the "Lender")

OF THE FIRST PART

AND


__________ of ______________________________________
(the "Borrower")

OF THE SECOND PART

IN CONSIDERATION OF the Lender loaning certain monies (the "Loan") to the Borrower, and the Borrower repaying the Loan to the Lender, both parties agree to keep, perform and fulfill the promises and conditions set out in this Agreement:

  1. Loan Amount & Interest
  2. The Lender promises to loan $____________________CAD to the Borrower and the Borrower promises to repay this principal amount to the Lender, without interest payable on the unpaid principal, beginning on November 27, 2020.
  3. Payment
  4. This Loan will be repaid in full on November 27th, 2020.
  5. Default
  6. Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing under this Agreement at that time to be immediately due and payable.
  7. Governing Law
  8. This Agreement will be construed in accordance with and governed by the laws of the Province of Alberta.
  9. Costs
  10. The Borrower shall be liable for all costs, expenses and expenditures incurred including, without limitation, the complete legal costs of the Lender incurred by enforcing this Agreement as a result of any default by the Borrower and such costs will be added to the principal then outstanding and shall be due and payable by the Borrower to the Lender immediately upon demand of the Lender.
  11. Binding Effect
  12. This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.
  13. Amendments
  14. This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.
  15. Severability
  16. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
  17. General Provisions
  18. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  19. Entire Agreement
  20. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this

SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

   


_____________________________
__________

     


SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

   


_____________________________
__________

     

Loan Agreement Information

What is a Loan Agreement?

A Loan Agreement, also known as a term loan, demand loan, or a loan contract, is a contract that documents a financial agreement between two parties, where one is the lender and the other is the borrower.

This contract specifies the amount of the loan, any interest charges, the repayment plan, and payment dates. A written contract gives both the borrower and lender a clear outline of the terms of the loan.

Typically, there are three types of term loans:

  • Business to business loan agreement: This is when one business, such as a bank, lends money to another business or startup.
  • Business to individual loan agreement: This is when a business provides a loan to an individual, such as a real estate lender providing a mortgage to a homebuyer.
  • Individual to individual loan agreement: This is when one person privately lends money to another, such as a family member or friend.

What does a Loan Agreement include?

Loan agreements generally include information about:

  • The location. People usually choose the lender's location for the Loan Agreement, but if the agreement is for the purchase of assets, then the parties might choose to list the location of the assets instead.
  • The lender and borrower. These details include name, address, and whether the lender or borrower is an individual or a corporation. You may also add a co-signer who agrees to pay the debt if the borrower defaults on the loan.
  • The loan amount. The amount of money being lent to the borrower is the loan amount.
  • Interest and late fees. If the lender charges interest, they may specify the percentage of interest and that it's compounded yearly. The lender may also penalize overdue payments by charging late fees or increasing the interest rate.
  • Repayment method. The borrower may repay the loan in a single payment or regular payments. The agreement should outline the repayment schedule, when the final amount is due, and if the borrower can repay the loan early or in lump sums.
  • Collateral and insurance. The borrower may secure the loan with collateral such as a vehicle, equipment, or jewellery. In this case, the lender may seize the collateral if the borrower cannot repay the full loan amount. The lender may also require the borrower to obtain insurance if using the loan to buy a vehicle.

How do I create a repayment plan?

LawDepot's Loan Agreement template allows you to choose from the following methods of repayment:

  • Single repayment: The borrower repays the entire loan amount at once (either by a specific date or upon notice to repay).
  • Regular payments: The borrower repays the loan in weekly, monthly, or yearly instalments.
  • Other: You may specify a non-traditional method of payment, such as allowing the borrower to make payments as they are able.
  • Early repayment: In addition to the specified payment schedule, the borrower may make lump sum payments at any time in order to repay the loan early.
  • Interest: The lender may charge interest at a certain percentage rate that compounds yearly. If the borrower fails to make a payment on time, the lender may increase the rate of interest or charge a late fee.

Should I charge interest in the Loan Agreement?

Interest is a way for the lender to charge money on the loan and compensate for the risk involved with the transaction.

You may choose to begin charging interest or increase the interest rate if the borrower fails to make a payment on time. The increased interest provides you with additional compensation for the borrower's failure to pay as promised and the trouble of having to enforce the Loan Agreement.

What happens if the borrower or lender dies before repaying the loan?

If the borrower dies before paying off the loan, authorities will use their assets to pay the remainder of the debt. If there is a co-signer, the responsibility for the debt falls to them.

If the lender dies before receiving the complete repayment, the borrower owes to the lender’s estate. In this case, the beneficiaries of the lender’s estate will collect the remainder of the debt.

If the loan is for a significant amount, it’s important that you update your Last Will to specify how you want to deal with the outstanding loan upon your death.

Related Documents:

  • Promissory Note: a document that serves as an enforceable promise to repay a loan
  • Bill of Sale: a proof of payment slip documenting the sale and transfer of an item between a buyer and a seller
  • Sales Agreement: an agreement outlining a future transaction between a seller and buyer
  • Invoice Form: a written statement confirming the purchase and sale of goods and services

Frequently Asked Questions:

Loan Agreement FAQ
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