Template loan agreement (loan for consumption) whereby a lender delivers a sum of money to a borrower who undertakes to return an equal sum. Under the Civil Code (Chapter 16) a loan for consumption transfers ownership of the thing lent to the borrower, who must return the like in quantity and quality. Interest is due only if it has been agreed. The template covers the amount, repayment, interest and default.
📄 Loan Agreement
LOAN AGREEMENT
THE LENDER: [full name], holder of identity card / passport No. [number], of [address].
THE BORROWER: [full name], holder of identity card / passport No. [number], of [address].
1. THE LOAN
The Lender lends to the Borrower the sum of [amount] EUR ([amount in words]), which the Borrower acknowledges having received. Ownership of the sum passes to the Borrower.
2. REPAYMENT
The Borrower undertakes to repay the said sum by [date] / in [number] instalments of [amount] EUR each, payable on the [number] day of each month, by [bank transfer to IBAN / other means].
3. INTEREST
The loan is granted [without interest / with interest at the rate of [rate]% per annum]. Interest, where agreed, is calculated on the outstanding balance and paid together with each instalment.
4. EARLY REPAYMENT
The Borrower may repay the whole or part of the loan before the agreed date, in which case interest, if any, shall be due only for the period during which the sum was actually used.
5. DEFAULT
In case of failure to pay on the due date, the Borrower shall owe interest at the legal rate on the sums in arrears from the date of default, without prejudice to any other remedy at law.
6. GOVERNING LAW AND JURISDICTION
This agreement is governed by the laws of Malta, and the Maltese courts shall have jurisdiction over any dispute arising from it.
Signed in duplicate at [place], on [date].
The Lender: ______________________ The Borrower: ______________________
Frequently asked questions
Is interest automatically due on a private loan?
No. Under the Civil Code interest on a loan for consumption is due only if it has been expressly agreed between the parties; otherwise the loan is interest-free.
Does the loan agreement have to be in writing?
A loan is valid even without writing, but a signed written agreement is strongly recommended as proof of the amount lent and of the repayment terms.
What happens if the borrower does not repay on time?
On default the borrower owes interest at the legal rate on the sums in arrears from the date of default, and the lender may pursue the other remedies available at law.