Template loan agreement under the Contract Law, Cap. 149. The lender advances a sum of money to the borrower, who undertakes to repay it, with or without interest, on the agreed terms. The template covers the loan amount, interest, repayment, security and default.
📄 Loan Agreement
TEMPLATE - LOAN AGREEMENT
made at [place] on [date]
BETWEEN:
The Lender: [full name / company name], ID/Registration No. [number], of [address] (the "Lender");
AND
The Borrower: [full name / company name], ID/Registration No. [number], of [address] (the "Borrower").
Clause 1. THE LOAN
The Lender agrees to lend and the Borrower agrees to borrow the principal sum of EUR [amount] ([amount in words]) (the "Loan").
Clause 2. ADVANCE
The Loan shall be advanced [in full / in instalments] on [date] by [transfer to account [IBAN] / cash]. The Borrower acknowledges receipt of the sums so advanced.
Clause 3. INTEREST
The Loan [shall be interest-free / shall bear interest at [___]% per annum on the outstanding balance]. Interest, where applicable, is calculated from the date of advance and does not exceed any statutory ceiling.
Clause 4. REPAYMENT
The Borrower shall repay the Loan [in a single payment on [date] / in [___] monthly instalments of EUR [amount] commencing on [date]] to account [IBAN]. The Borrower may repay early [without / subject to] any charge, as stated here.
Clause 5. SECURITY
Repayment is [unsecured / secured by [guarantee / pledge / mortgage: describe]]. Any security document forms part of this agreement.
Clause 6. DEFAULT
If the Borrower fails to pay any sum on its due date, the Lender may, after written notice and expiry of [___] days, demand immediate repayment of the whole outstanding balance. Default interest, if any, is EUR/[___]% as stated and shall not exceed the lawful maximum.
Clause 7. GENERAL
Matters not regulated here are governed by the Contract Law, Cap. 149. Any variation shall be in writing. This agreement is executed in two identical counterparts.
Lender: ............................. Borrower: .............................
(date and signature) (date and signature)
Frequently asked questions
Does a loan have to carry interest?
No. A loan may be interest-free. If interest is charged it must be clearly stated and must respect any statutory limits; the template lets the parties set the rate or record that the loan is interest-free.
Should a loan agreement be in writing?
Writing is not always a condition of validity, but a written agreement is strongly recommended as evidence of the amount lent, the interest and the repayment terms, and it is essential where security is given.
What happens if the borrower defaults?
The agreement lets the lender, after written notice and a cure period, call in the whole outstanding balance. Remedies for breach and any default interest are subject to the Contract Law, Cap. 149 and to the statutory limits on interest.