Loan Agreement
A simple interest-free loan agreement between two individuals in India, recording a personal loan (here, to help the borrower purchase a residential flat), repayable in instalments over a fixed period. It records the loan amount, the interest-free terms, the fixed repayment period, and the borrower's personal guarantee, and confirms that the terms are agreed by mutual consent.
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 for 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:
Signature: ________________________
In the presence of: ________________________
SIGNED AND DELIVERED by the within-named Borrower:
Signature: ________________________
In the presence of: ________________________
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About this template
What is this template?
This is a brief, four-clause loan contract for an interest-free debt between individuals. It contains a specific purpose clause for a residential flat purchase and a personal guarantee from the borrower, but it lacks default interest provisions or acceleration clauses found in commercial loans.
When should you use it?
Use this when a friend or family member provides a simple, interest-free personal loan in India. Use a Promissory Note or a Facility Agreement instead if the loan is commercial or carries interest.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Loan Purpose and Amount | The Lender provides an interest-free loan in Rupees specifically to enable the Borrower to purchase a residential flat. |
| 2 | Loan Period | The loan runs for a specific number of years with defined start and end dates entered by the parties. |
| 3 | Repayment and Guarantee | The Borrower must repay the principal in instalments within the stated term and provides a personal guarantee for the debt. |
| 4 | Mutual Consent | The parties confirm that all terms and conditions were reached through mutual consent. |
Who it's for
- an individual lending a specific sum in Rupees to an acquaintance for a home purchase
- a borrower receiving an interest-free loan to be repaid in installments over a fixed year term
How long it runs and how it's signed
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