Loan Agreement (India)
This is a straightforward template for an interest-free loan agreement between two individuals who have a pre-existing relationship. It outlines the loan amount, the purpose of the loan (such as purchasing a flat), and the agreed-upon repayment period and method.
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 __/__/1999 and terminating on __/__/_____.
3. The Borrower hereby agrees and undertakes to return the loan of Rs.___________/- (Rupees ______________________ only), in installments, 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 of
SIGNED AND DELIVERED by the within-
Named Borrower in the presence of
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About this template
What is this template?
This is a formal credit agreement for use within India that establishes the legal obligation to repay a debt with interest. It is not a bank-issued mortgage or a complex mezzanine financing agreement. It specifically includes sections for EMI calculations and Indian court jurisdiction.
When should you use it?
Use this when documenting a private loan between two parties in India to ensure the debt is enforceable in local courts. If the arrangement is for an interest-free advance between family members, a Promissory Note may be used instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| Clause 1 | Loan Amount and Interest | Specifies the principal amount and the annual interest rate applicable to the borrower's debt. |
| Clause 2 | Repayment | Defines the schedule for installment payments or the final date for the full repayment of the loan. |
| Clause 5 | Events of Default | Lists conditions under which the lender can demand immediate full repayment, including non-payment after a set grace period. |
| Clause 8 | Governing Law and Jurisdiction | Subject to Indian law, this clause designates specific courts in India for resolving disputes. |
Who it's for
- an Indian resident lending money to another individual
- a small business owner in India securing a private loan
- parties in India formalizing a debt arrangement with specific interest rates
How long it runs and how it's signed
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