A loan agreement records a loan of money from a lender to a borrower and the terms of repayment, including any interest. Use it for a private loan between individuals or businesses. Where the loan is credit provided to a consumer by a business, the Consumer Credit Act 1995 imposes additional form and disclosure requirements.
📄 Loan Agreement
LOAN AGREEMENT
THIS AGREEMENT is made on [date]
BETWEEN
Lender: [full name], of [address] ("the Lender")
AND
Borrower: [full name], of [address] ("the Borrower")
1. THE LOAN
The Lender agrees to lend and the Borrower agrees to borrow the sum of EUR [amount] ("the Loan").
2. ADVANCE
The Lender shall pay the Loan to the Borrower on [date] by [bank transfer to IBAN [____] / other method].
3. INTEREST
[The Loan is interest-free.] / [Interest accrues on the outstanding balance at [X]% per annum, calculated [monthly].]
4. REPAYMENT
The Borrower shall repay the Loan [in a single payment on [date]] / [by [X] equal instalments of EUR [amount] on the [X] day of each month, beginning on [date], until repaid in full]. Payments shall be made to [account details].
5. EARLY REPAYMENT
The Borrower may repay all or part of the Loan early at any time [without penalty].
6. DEFAULT
If the Borrower fails to pay any amount when due and does not remedy the failure within [X] days of written notice, the whole outstanding balance becomes immediately payable [together with interest at [X]% per annum on overdue amounts].
7. SECURITY
[The Loan is unsecured.] / [The Loan is secured by the following: [describe security].]
8. COSTS
Each party bears its own costs of this Agreement, unless the Borrower is in default, in which case the Borrower shall pay the Lender's reasonable costs of recovery.
9. GOVERNING LAW
This Agreement is governed by the law of Ireland.
Signed by the Lender: ______________________ Date: __________
Signed by the Borrower: ______________________ Date: __________
Frequently asked questions
Does a private loan need to be in writing?
A loan between private individuals can be valid without writing, but a written agreement is strongly advisable so that the amount, interest and repayment terms are clear and provable. Where a business lends to a consumer, the Consumer Credit Act 1995 requires the agreement to be in a prescribed written form.
Can I charge interest on a private loan?
Yes, the parties can agree interest and it should be stated as an annual rate. If a business provides credit to a consumer, additional disclosure rules under the Consumer Credit Act 1995 apply, including how the cost of credit is presented.
How long do I have to recover an unpaid loan?
Court action to recover a simple contract debt must generally be started within the limitation period set by the Statute of Limitations 1957. It is best to act promptly and to keep written records of the loan and any repayments.