Free Loan Agreement

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Loan Agreement

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LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement") dated this ________ day of ________________, ________

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 July 20, 2019.
  3. Payment
  4. This Loan will be repaid in full on July 20th, 2019.
  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 and interest due 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. All costs, expenses and expenditures including, without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.
  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 ________ day of ________________, ________

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

   


_____________________________
__________

     


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

   


_____________________________
__________

     
Need Help With This Question? Document PreviewAbout this Document

Loan Agreement

When should I use a Loan Agreement?

A Loan Agreement, also known as a Term Loan, Demand Loan, or a Loan Contract, is a contract that is used to document a financial agreement between two parties, where one is the lender, and the other is the borrower.

It specifies the amount of the loan, what the interest on it will be, what the repayment plan is, and payment dates so that both the borrower and lender have a clear outline of the terms of the loan.

Term Loans are often divided into three types:

Business to business loan agreement: This is when one business, for example, a bank, lends money to another business such as a startup or small business.

Business to individual loan agreement: This is when a business, such as a real estate lender, provides a loan to an individual, such as a mortgage to a homebuyer.

Individual to individual loan agreement: This is when one person privately lends money to another, such as his or her family member or friend.

How does a term loan work?

When one party lends a large sum of money to another, it is beneficial to have a Loan Agreement so that both parties are protected and understand the terms of the debt terms and repayment.

Prior to creating a Loan Agreement, the lender should decide what the terms of the loan will be, including the interest rate, payment due dates, and if there will be any collateral or security provided by the borrower.

How to determine an interest rate:

Look into current interest rates at financial institutions to determine a fair percentage of interest to charge the borrower. Calculate what that will amount to on its own and add it to the monthly payment amount.

How to determine payment amount:

Generally, term loans are for a set number of months or years. If payments are due on a monthly basis, divide the full amount of the loan by the number of months the borrower has to pay it off. Add the monthly interest charge to that amount.

How to determine a repayment plan:

When creating a Loan Agreement, it is important to designate the length and terms of the loan. That means deciding when the loan will be fully repaid, and when and how often payments are due.

What is collateral?

Collateral or security is what allows the lender to receive compensation even if the borrower fails to mean the terms within the Loan Agreement. For example, a borrower could provide a vehicle as collateral to the lender. If the borrower fails to make payments, the lender may, after receiving permission from the court, seize the borrower's collateral in order to replace some or all of the money that was lent.

Collateral is most often used when there is a high risk that the borrower will default on the payment terms, a significant amount of money is being lent, or where the money borrowed is used to purchase the collateral.

Once a payment amount, interest rate, collateral, and payment schedule have been decided, it's up to the borrower to meet the terms of the repayment plan as outlined in the Loan Agreement. In some cases, if a borrower fails to make a payment, the interest rate will be increased for the remainder of the term.

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:

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