A loan agreement is a contract between the borrower and the lender stipulating the terms and conditions for the grant of loan to the borrower. A loan can be taken from a lending institution, friends, family member etc..
A loan agreement is essential irrespective of the fact to whom it is given. Even if the loan is given to a friend or a family member, it’s always better to have a loan agreement. It serves as a legal document for settling disputes that may arise between the borrower and the lender later.
A loan agreement contains the following information:
A loan agreement must be signed by both the parties in order to avoid any dispute that may occur later.