How do I write a simple personal loan agreement

Quick And Easy Personal
Loans Up To $2500

By CreditNinja
Modified on March 7, 2024

When facing emergency expenses that you can’t afford to cover on your own, you have several options you can look into for a solution. Without an emergency fund available, borrowing money to cover those unexpected expenses and paying back later might be necessary to get through this hard time. Personal loans and credit cards are widely available and relied upon for covering last-minute costs, but they can be expensive when you add up all the fees and interest charges.

To avoid the cost of borrowing money from a lender or a credit card company, some people choose to ask a family member or friend to lend them money. This can be nerve-wracking because mixing finances into personal relationships can bring about tension and communication issues. When borrowing money from friends or family, most financial experts will advise you to talk about everything beforehand and get it all in writing. Creating your own simple personal loan agreement can help you make sure that things go smoothly with your loved one while still allowing you to save a ton of money in interest.

Writing up a simple Personal loan agreement when borrowing money from family or friends is pretty straightforward as long as you remember to include important details you might need to refer back to. Here is a general list of information you will want to include in your own loan agreement:

  • The full names and addresses of both the lender and the borrower.
  • The exact amount of money borrowed.
  • The date that the loan was given and the expected date for repayment.
  • Interest rate and/or annual percentage rate, if applicable.
  • Details of the payment terms, including the dates and amounts of installments.
  • Options for changes in the terms of the loan and how potential issues or disputes will be resolved.
  • Signatures from both the lender and the borrower with the date of the signing.

You might think all these details are overboard for a loan between friends or family. But it is always better to be over-prepared because you never know what could go wrong along the way. Financial advisors also suggest that the borrower should always insist on an interest rate even if the lender says it is not necessary. Offer to pay them the equivalent of interest they would accrue if they put the money into a high-yield savings account. By doing this, everyone benefits from the arrangement as the APR on a savings account is still significantly lower than you’d pay on a personal loan from a bank or credit union.

Credit Education & Credit Reporting
Does a secured loan hurt your credit?
Can you get a secured loan with a 500 credit score?
What credit score is needed for a 100k personal loan
How many points does a loan affect credit score
How do I write a simple personal loan agreement
How do you determine credit worthiness
Why does a hard inquiry hurt your credit
What is a soft credit check
What is a hard credit inquiry
Who will give loans with bad credit
On average how much of a personal loan can you get with an 850 credit score
How to get a personal loan with a thin file credit score
How can I get a personal loan with 690 credit score
What personal loan rate should I expect with 746 credit score
How can I get approved for a personal loan with a 630 credit score
My credit score is 736 what is the most I can get for a personal loan
What credit score is needed for a personal bank loan
What are personal loan rates if I have a 780 credit score
Can I get a personal loan with a 635 credit score?
How much can I get in a personal loan with a 640 credit score
Where can I get a personal loan with a 513 credit score
Where can I get an unsecured personal loan with a 500 credit score and a co-signer
What are the chances of getting a personal loan with a 648 credit score
How much of a personal loan can I get with a credit score of 480
How much of a personal loan can I get with a credit score of 750
How to report credit card debt consolidation loan on taxes
If 700 credit score which is better debt consolidation loan or credit card
Can you get a personal loan with a credit score of 550
How big of a personal bank loan can you get with a credit score of 600
What happens to my credit score when I pay off personal loan
Where can you get a personal loan with a 435 credit score
What does my credit score need to be to get a personal auto loan
What Credit Score Is Needed For a Personal Loan
How does a personal loan affect credit score

Quick And Easy Personal Loans Up To $2500*