Loan Agreement

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Loan Agreement

A loan agreement is a contract between a borrower and a lender which regulates the mutual promises made by each party.It is a formal document that evidences a loan. There are many types of loan agreements, including “facilities agreements,” “revolvers,” “term loans,” “working capital loans.”

The object of loan agreement is that it determines the terms and condition between the lender and borrower. The agreement is binding on both the parties and  is enforceable by law 

  DRAFT OF LOAN AGREEMENT

LOAN AGREEMENT BETWEEN
________________________

AND ______________________

THIS AGREEMENT made and entered into at _______ this ____ day of_______, ______ BETWEEN __________________ hereinafter called “the Lender” AND ________________________ hereinafter called “the Borrower” and reference to the parties hereto shall mean and include their respective heirs, executors, administrators and assigns;

WHEREAS the Borrower is in need of funds and hence has approached the Lender to grant her an interest-free loan of Rs.________/- (Rupees ____________________ only) for a period of ____ years;

AND WHEREAS the Lender has agreed to grant a loan to the Borrower, free of interest, as the Lender and the Borrower have known each other since several years;

AND WHEREAS the parties hereto are desirous of recording the terms and conditions of this loan in writing;

NOW THIS AGREEMENT WITNESSETH and it is hereby agreed by and between the parties hereto as under:-

1.     The Borrower hereto, being in need of money, has requested the Lender to give her an interest-free loan of Rs.___________/- (Rupees _________________________ only) to enable her to purchase a residential flat, to which the Lender has agreed.

2.     The said loan is required by the Borrower for a period of ____ years, commencing from __/__/___ and terminating on __/__/_____.

3.     The Borrower hereby agrees and undertakes to return the loan of Rs.___________/- (Rupees ____________________only), in instalments, within the aforesaid period of ____ years and gives her personal guarantee for the same.

4.     The terms and conditions of this Agreement are arrived at by the mutual consent of the parties hereto.

IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands the day and year first hereinabove written.

SIGNED AND DELIVERED by the Within-

named Lender in the presence 

SIGNED AND DELIVERED by the Within-

named Borrower in the presence of

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