Loan Agreement

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What is a Loan Agreement?

This is a contract where one party (called the “lender”) lends a sum of money to another (called the borrower). The borrower is the party who accepts the money from the lender and undertakes that the borrowed sum will be repaid with interest. The lender is the party giving the money to the borrower on the condition that the principal sum will be repaid at a specified date with or without interest.

 

The loan agreement states the parties to the loan, the sum loaned, the interest rate and other terms and conditions. There are short term loans, long term loans, and unsecured loans amongst others.

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