If you`re planning on borrowing money from a friend, family member, or acquaintance, it`s essential to have a loan agreement in place. A loan agreement, also known as a promissory note, is a legally binding contract that outlines the terms and conditions of the loan, including repayment terms, interest rates, and penalties for late payments.

To help you create a loan agreement that protects both parties involved, we`ve put together a sample contract for borrowing money. Keep in mind that this is just a template and should be customized to fit your specific situation and needs.

Loan Agreement

This Loan Agreement (the “Agreement”) is made and entered into as of the __________ day of __________, 20______ (the “Effective Date”), by and between ________________________ (the “Lender”) and ________________________ (the “Borrower”).

1. Loan Amount: The Lender agrees to loan the Borrower the sum of _______________ dollars ($___________), to be paid to the Borrower in full on the Effective Date.

2. Repayment Terms: The Borrower agrees to repay the loan amount in full to the Lender on or before the __________ day of __________, 20_____ (the “Due Date”). The Borrower shall make payments of __________ dollars ($__________) on the __________ day of each month, starting on __________, 20______. The Borrower may make payments in full at any time without penalty.

3. Interest Rate: The Borrower agrees to pay interest on the outstanding principal balance of the loan at a rate of __________ percent per annum, calculated monthly, compounded annually.

4. Late Payment Penalty: If the Borrower fails to make a payment on the Due Date, the Borrower shall pay the Lender a late payment penalty of __________ dollars ($_________).

5. Default: If the Borrower fails to make a payment for a period of __________ days after the Due Date, the Lender may declare the entire balance of the loan immediately due and payable.

6. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state of ___________.

7. Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between the parties, whether oral or written.

8. Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

________________________ ________________________

[Lender Signature] [Borrower Signature]

We hope that this sample contract for borrowing money helps you create a loan agreement that protects your interests. Remember to consult with legal counsel if you have any questions or concerns regarding the terms of a loan agreement.