When it comes to borrowing or lending money between family members, it’s always a good idea to have a loan agreement in place. This can help to avoid any misunderstandings or disputes that may arise.
A loan agreement is a legally binding document that outlines the terms and conditions of the loan. In most cases, it will include information such as the amount borrowed, the interest rate (if any), the repayment schedule, and any penalties for late payments.
While there are plenty of loan agreement templates available online, it’s always best to consult with a lawyer to ensure that everything is in order. However, if you’re looking for a free sample loan agreement between family members, you may want to consider the following:
Loan Agreement between Family Members
1. The Parties
This loan agreement is made between [Lender’s Name] (the “Lender”), and [Borrower’s Name] (the “Borrower”).
2. Loan Amount
The Lender agrees to loan the Borrower the amount of [Loan Amount] (the “Loan”), which will be provided in [Check/Cash/Other].
3. Interest Rate
There will be no interest charged on this loan.
4. Repayment Schedule
The Borrower agrees to repay the Loan in [Number of Payments] payments of [Payment Amount] each. The first payment is due on [Due Date], and subsequent payments will be due on the [Payment Due Date] of each month thereafter until the Loan is paid in full.
5. Late Payment Penalties
If the Borrower is late in making any payment, there will be a [Late Payment Charge] late payment charge.
6. Prepayment
The Borrower may prepay the Loan at any time without penalty.
7. Default
If the Borrower fails to make a payment under this loan agreement, the Lender may declare the entire Loan amount due and payable, and take legal action to recover the outstanding amount.
8. Governing Law
This loan agreement will be governed by the laws of [State/Province].
9. Entire Agreement
This loan agreement constitutes the entire agreement between the Lender and the Borrower, and supersedes all prior agreements and understandings, whether written or oral.
10. Signatures
This loan agreement will be binding upon and inure to the benefit of the parties, their heirs, executors, administrators, successors, and assigns. It is executed on the date and year first above written.
[Lender’s Signature] [Borrower’s Signature]
[Lender’s Printed Name] [Borrower’s Printed Name]
Loan agreements may seem like a small detail, but they can make a big difference in the long run. By having everything in writing, you can avoid any misunderstandings or disputes that may arise. So, if you’re thinking about lending or borrowing money from a family member, consider using a loan agreement to protect everyone involved.