Simple personal unsecured loan agreement template between individuals (related or unrelated). This is drafted at in neutral form.
At the request of the Borrower, the Lender agrees to advance the loan to the Borrower on the terms of this agreement. The Borrower is to pay: (a) interest at the Interest Rate calculated on the daily balance of the Principal Outstanding from and including the date the Loan or any part of it is first advanced until the Principal Outstanding is fully repaid; and (b) on each Interest Payment Date, all interest accrued but unpaid on the Principal Outstanding as at that Interest Payment Date, without set-off or deduction, including for Taxes.
If any payment default occurs, all interest then becomes payable on demand. The Borrower is to pay on demand interest at the Interest Rate on any Other Amount Payable from when it becomes due for payment until it is paid. Any interest which is not paid when due for payment may be capitalised by the Lender at such intervals as the Lender may decide. Interest is payable on capitalised interest calculated as provided and on-demand.
The Borrower shall be entitled to pay larger instalments than prescribed or the full balance of capital and interest at any time prior to the prescribed dates of payment. In any such event, interest shall be calculated up to the date of payment.
If liability under this agreement becomes merged in a judgment or order, then the Borrower agrees to pay interest to the Lender on the amount of that liability as an independent obligation. This interest accrues from the date the liability becomes due for payment both before and after the judgment or order until it is paid, at a rate that is the higher of the rate payable under the judgment or order and the Interest Rate. The Borrower is to repay the Principal Outstanding and all Other Amounts Payable.
Late Charge: Any payment not remunerated within 10 days of its due date shall be subject to a belated charge of 5% of the payment, not to exceed $500 for any such late instalment.
Default: If Borrower has not paid the full amount of the loan when the final payment is due, the Lender will charge Borrower interest on the unpaid balance at 20% per year.
If the Borrower becomes insolvent, the Lender may demand immediate repayment of the Principal Outstanding and the payment of any Other Amount Payable then unpaid, notwithstanding any other provision of this agreement; and the Borrower agrees to immediately comply with such a demand.
This document should be carefully read by the Individual Borrower and Lender.
Upon the situation where the lender agrees to provide the borrower with a loan, this loan agreement format may be used to draft a loan agreement in neutral form.
Both parties should sign and return a copy, and once signed, both parties should get a copy. To avoid any future disputes, both parties may wish to have their signatures witnessed.
The Principal Loan to be borrowed, Interest Rate, and Interest Payment Date should all be clearly stated in the loan agreement.
If either party wishes to amend the agreement in the future, both parties should agree to do so, and the original agreement and amendments should be recorded in writing and signed by both parties.
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4. Please get all parties to review the document carefully and make any final modifications to ensure that the details are correct before signing the document. Each party should have a copy of the executed document.
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