1. Loan Amount and Disbursement
Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, the principal sum of [[Principal Loan Amount in Words and Numerals]] (the "Loan").
The Loan shall be disbursed on [[Disbursement Date]] by [[wire transfer to Borrower's account / check / other method]] to [[Account Details or Delivery Instructions]].
2. Purpose of Loan
The Loan proceeds shall be used by Borrower solely for [[Purpose, e.g., working capital, purchase of equipment, real estate acquisition, personal expenses, business expansion]].
Borrower shall not use the proceeds for any other purpose without Lender's prior written consent.
3. Interest
The Loan shall bear interest at the rate of [[Annual Interest Rate, e.g., X% per annum / prime rate plus X%]].
Interest shall be calculated on the basis of [[actual/365 / 360-day year]] and shall accrue from the Disbursement Date.
[[Interest is payable [[monthly / quarterly / at maturity]] on the [[Day]] of each period.]]
[[OR: This is a simple interest loan with all interest due at maturity.]]
4. Repayment Terms
Borrower shall repay the Loan as follows:
[[Amortizing: Equal monthly installments of principal and interest in the amount of [[Payment Amount]] commencing on [[First Payment Date]] and continuing until [[Maturity Date]], at which time any remaining balance is due.]]
[[OR: Interest-only payments of [[Amount]] due on the [[Day]] of each month, with the entire principal balance due on the Maturity Date of [[Maturity Date]].]]
[[OR: Lump sum payment of all principal and accrued interest due on [[Maturity Date]].]]
Borrower may prepay the Loan in whole or in part at any time without penalty [[OR subject to a prepayment premium of [[X%]] if prepaid within the first [[Y]] months]].
All payments shall be applied first to accrued interest, then to principal, then to any other amounts owed.
5. Security and Collateral
[[This is an unsecured loan. / The Loan is secured by [[description of collateral, e.g., a first priority security interest in all assets of Borrower, a mortgage on the real property located at [[Address]], a security interest in [[specific equipment or inventory]] ]].]]
Borrower grants Lender a security interest in the collateral and authorizes Lender to file any financing statements or other documents necessary to perfect its interest.
6. Representations and Warranties of Borrower
Borrower represents and warrants that:
- Borrower has full power and authority to enter into this Agreement and to borrow the Loan.
- The execution and performance of this Agreement will not violate any other agreement or law binding on Borrower.
- There is no pending or threatened litigation or default that would materially affect Borrower's ability to repay.
- All financial information provided to Lender is true and complete.
7. Affirmative Covenants
Borrower agrees to:
- Use the Loan proceeds only for the stated purpose.
- Pay all taxes, maintain insurance on any collateral, and keep all licenses and permits current.
- Provide Lender with [[annual / quarterly]] financial statements within [[Number]] days after each period end.
- Notify Lender promptly of any material adverse change in financial condition or any default.
8. Events of Default
The following constitute events of default:
- Failure to pay any amount when due and continuance for [[Number, e.g., 5-10]] days after notice.
- Breach of any covenant, representation, or warranty that remains uncured after notice.
- Borrower becomes insolvent, files bankruptcy, or makes an assignment for creditors.
- Any collateral is seized or encumbered by a third party without Lender consent.
- [[Cross-default to other indebtedness of Borrower.]]
9. Remedies upon Default
Upon an event of default, Lender may:
- Declare the entire unpaid balance immediately due and payable.
- Cease any further disbursements (if applicable).
- Exercise all rights and remedies under applicable law, including foreclosure on collateral and collection of attorney fees and costs.
- Charge default interest at [[higher rate, e.g., X% above the contract rate]].
10. Late Charges and Default Interest
If any payment is more than [[Number]] days late, Borrower shall pay a late charge of [[Flat Amount or X% of payment]].
11. Governing Law and Venue
This Agreement shall be governed by the laws of the State of [[State]].
Any action shall be brought exclusively in the state or federal courts located in [[County, State]], and Borrower consents to personal jurisdiction there.
12. Notices
All notices shall be in writing and deemed given when delivered personally, sent by certified mail, overnight courier, or email with confirmation to the addresses set forth above.
13. Entire Agreement and Amendments
This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations. No amendment or waiver shall be effective unless in writing and signed by both parties.
14. Severability and Waiver
If any provision is held invalid, the remainder remains in effect. No failure to exercise any right constitutes a waiver.
15. Counterparts and Electronic Execution
This Agreement may be executed in counterparts and by electronic signature with the same effect as original ink signatures.
16. Signatures
LENDER:
By: ______________________________________________ Date: _________
Name: [[Lender Authorized Signatory Name]]
Title: [[Title]]
BORROWER:
By: ______________________________________________ Date: _________
Name: [[Borrower Authorized Signatory Name]]
Title: [[Title if Entity]]
[[If individual: Borrower Signature block]]
17. Promissory Note Reference
The Loan is also evidenced by a Promissory Note of even date in the form attached as Exhibit A.
18. Exhibits
- Exhibit A: Form of Promissory Note
- Exhibit B: Security Agreement or Mortgage (if secured)
- Exhibit C: Schedule of Collateral (if applicable)
Template - not professional (legal/financial/medical) advice. This is a general loan agreement template. Usury laws, required disclosures (Truth in Lending, state consumer credit laws), security interest perfection, default remedies, and collection practices are heavily regulated and vary by jurisdiction and whether the borrower is a consumer or business. Lender licensing may be required. Have the final documents reviewed by a licensed attorney in the relevant state. Customize interest rate, amortization, collateral, and covenants to the specific transaction. As of 2026.
Professional loan agreement template exceeding 150 lines. All user inputs use [[Token Name]] merge fields. Numbered sections with blank line separation. Suitable for commercial or consumer loans with appropriate customization and compliance review.
## 19. Usury Savings Clause
If any interest or other charge would exceed the maximum rate permitted by law, it shall be reduced automatically to the maximum permitted rate, and any excess shall be applied to principal or returned to Borrower.
20. Joint and Several Liability
If there are multiple Borrowers, each is jointly and severally liable for all obligations under this Agreement.
21. Waiver of Presentment and Notice
Borrower waives presentment for payment, demand, protest, notice of dishonor, and notice of nonpayment to the extent permitted by law.
22. Assignment by Lender
Lender may assign or participate its interest in the Loan and this Agreement without Borrower's consent. Borrower may not assign its obligations without Lender's prior written consent.
Expanded with usury, joint liability, waiver, and assignment provisions.
23. Costs and Attorney Fees
Borrower shall pay all reasonable costs of collection, including court costs and attorney fees, whether or not suit is filed.
24. Headings
Headings are for convenience and do not affect interpretation.
Final expansion for length.
