A loan agreement between two parties is a kind of contract between two people or companies or entities. The people involved can be a lender and a borrower or even people from the same family.
The different kinds of loans are working capital loans, facilities agreement loan, term loan and revolvers. A loan agreement between two people are the main reason for the destruction in their relationship. But always remember, money may come today and go tomorrow, but it is the relationship that must last and cannot be rebuilt if destroyed.
So, always have a careful read through and make the agreements thoughtfully. Sample loan agreement between two parties is given below in the article. But read through for tips before you download them.
Steps for Writing Loan Agreement Between Two Parties
It is very crucial to mention every possible detail in the agreement in a sequential manner and hence it is recommended to follow the below written steps.
- Title: choose a suitable title for the agreement. Center the title and make sure it’s in bold. Even a simple title like ‘Loan Agreement Between Individuals’ would suffice. But it’s your agreement and you must know the best name for it.
- Know The Parties: for every person mentioned in the agreement, identify them, clearly. Like if the person is the borrower or lender or witness. You might like Fax Cover Templates.
- Mention Date: this might seem very silly, but this is one of the most crucial things to write down in an agreement. It serves as proof for the future.
- Mention The Amount and Rate of Interest: this is the core part of the document. This gives identity to the loan. Make sure the loan amount and the rate of interest is written in the agreement. Also, don’t forget to mention the type of interest that is simple interest or compound interest. Also, add details if the interest rate is fixed or floating type.
- Insert About Late Fees and Repayment Clause: this is a very important part as this decides how the loan is repaid and what happens if it is not paid on time. In other words, this can ensure timely repayment of the borrowed amount. Give every detail for this section.
Format of Loan Agreement Between Two Parties:-
Sample of Loan Agreement Between Two Parties:-
Lending and borrowing are often considered a funny activity when it is done between family members and loved ones. It plays an important role in both destroying and maintaining the relationship with your loved ones. It could be for many things like buying a car or a house, education or sudden healthcare expenses. It is always the best to do it in a legally documented fashion so that in case of any problems, a proof exists in your side. Find out more templates.