Loan Bond with Sureties and Lower Rate of Interest in Case Punctuality in Payment
Updated 15 July 2026
A loan bond in India recording a personal loan supported by two sureties, with a reduced rate of interest as an incentive for punctual repayment. The debtor acknowledges receipt of the loan and undertakes to repay it in half-yearly instalments with interest; if an instalment is paid at least 15 days before its due date, a lower interest rate applies. The two sureties jointly guarantee repayment of any unpaid loan and interest if the debtor defaults.
LOAN BOND WITH SURETIES AND LOWER RATE OF INTEREST IN CASE OF PUNCTUALITY IN PAYMENT
THIS DEED is executed on this ______ day of ____________ at ____________, between:
1. Mr. X, s/o Mr. Y, r/o ____________ (hereinafter called "the Debtor") of the First Part;
2. Mr. A, s/o B, r/o ____________, and Mr. DC, s/o RA, r/o ____________ (hereinafter jointly called "the Sureties") of the Second Part; and
3. Mr. C, s/o D, r/o ____________ (hereinafter called "the Creditor") of the Third Part.
WHEREAS the Creditor has agreed to advance a loan of Rs. 5,00,000.00 to the Debtor, which is to be repayable in four years with interest at the rate of 18% per annum, provided two persons stand as sureties of the Debtor;
AND WHEREAS the Sureties above named are ready to stand as sureties of the Debtor.
NOW THIS DEED WITNESSETH AS UNDER:
1. That in pursuance of the said agreement, the Creditor has advanced a sum of Rs. 5,00,000.00 (Rupees five lacs only), the receipt of which has been acknowledged by the Debtor.
2. The Debtor shall repay the loan in five years in half-yearly instalments of Rs. 50,000/- with interest at the rate of 12% per annum.
3. That in case the Debtor repays the instalment of loan at least 15 days before the due date, the interest shall be paid at the rate of 10% per annum.
4. That in case of failure on the part of the Debtor to repay the loan and interest, or any part thereof, the Sureties shall be liable to repay such unpaid amount of loan and interest, to which the Sureties have agreed.
We, the above-noted parties, have signed this deed on the date and at the place mentioned above, after fully understanding the contents of this deed, in the presence of the following witnesses.
Name: ____________ Signature: ____________
Address: ____________
(Debtor)
Name: ____________ Signature: ____________
Address: ____________
(Surety)
Name: ____________ Signature: ____________
Address: ____________
(Surety)
Name: ____________ Signature: ____________
Address: ____________
(Creditor)
WITNESSES:
1. ________________________
2. ________________________
About this template
What is this template?
Loan Bond with Sureties and Lower Rate of Interest in Case Punctuality in Payment is a free, ready-to-use Banking and finance template you can open, customize, and download on GitLaw. It gives you a professionally structured starting point, so you never have to draft from a blank page. The wording is plain and modern, organized into clear sections that are easy to read, edit, and adapt to your own situation before you share or sign it.
When should you use it?
Reach for this Banking and finance template whenever you need a reliable agreement quickly and want to be sure the essentials are covered. It suits individuals, freelancers, startups, and established businesses alike. Instead of paying for a document drafted from scratch, you can start here, tailor the details to your arrangement, and have a polished draft ready in minutes. This version is drafted with India in mind, though you should always review the final wording against the laws that apply to you.
What's typically included?
A well-drafted Banking and finance usually sets out the parties involved, the scope of the agreement, and each side's rights and responsibilities. Expect sections covering key terms and definitions, how long the agreement lasts, how it can be ended, and what happens if something goes wrong. This template brings those building blocks together in a sensible order, so you can focus on the specifics rather than worrying about what to include. Open it to read the full document, then sign up to edit, negotiate, and e-sign it directly in GitLaw.