This is a simple loan agreement suitable for lending to friends or family. It is intended to make clear to the borrower that the arrangement is "for real" and that the lender intends that the money should be repaid on time as agreed. It is ideal for lending in situations such as large one-off purchases, funding of events, and consolidation of other debts.
Friends and family loan agreement
145 reviews
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- Length:3 pages (650 words)
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About this loan agreement
Lending to friends and family can be difficult.
Not using a written agreement can result in confusion about when the money should be repaid and with how much interest, or a loan could be mistaken as a gift, either by the borrower or other family members or friends.
A written agreement may seem too formal - especially if it is written in a legalistic style. It may prompt the borrower to question your relationship and whether you trust him or her.
This loan agreement is a simple agreement that aims to bridge the gap between not using an agreement at all, and using a longer, more comprehensive one.
When to use this agreement
This is a simple agreement. It contains no provisions for security or for a guarantor. If you need these, look at our other Loan agreement templates or see the most likely alternatives below.
However, it is a legally binding document and you can take action against the borrower if he or she doesn't pay you on time, or uses the loan for a reason not agreed.
Use this agreement when you need to record the loan, but where you have a high level of trust with the borrower.
It is suitable for situations such as:
- lending to a friend to buy a car or other high priced item
- lending to a child for a house deposit
- lending to a child to fund a wedding
Either party may be abroad or in the Republic of India, and the loan can be of any size.
Alternatives to this document
If you need a more comprehensive agreement, but are happy for the loan to be unsecured, see our standard Unsecured loan agreement: person to person; private or business.
If you need a guarantor, then see Loan agreement: person to person; secured by guarantee.
The law in this document
There is little specific statutory law relating to personal lending, so you are free to agree the terms you want with the borrower. We give you options for different situations.
Drawn outside the consumer credit legislation, this agreement is not suitable for companies in the business of lending or providing credit to consumers.
The contents of the agreement
- Definition and purpose of the loan
- Sum of the loan and advances
- Repayment conditions
- Interest payable
- Miscellaneous legal matters
This template is supported by drafting notes so that you will know whether you can safely delete some provision. It is most unlikely that you will want to add new provisions, but if you do, it is easy. Our layout and use of plain English also make it very easy to edit by deletion.
Reviews of this document
145 Reviews
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Recent reviews
The service was quick, efficient and good value. I decided to go with the advisory service and got a prompt return call from Thomas who gave simple clear advice. I forwarded them my draft copy for review and got a clear revised common sense reply within 12 hours.
Solicitors quoted £1800 and £800 for the same service. I paid a tenth of that!
Thanks, I hope that I won't need you again, but know where to come if a do.
Solicitors quoted £1800 and £800 for the same service. I paid a tenth of that!
Thanks, I hope that I won't need you again, but know where to come if a do.
Alan Walker
Review of the United Kingdom version
Wanted a document for an in-family loan. I was looking for a free or low-fee document that looked like it was created by a lawyer.
Decided to buy Net Lawman document because it was low fee and appeared to provide for in-family agreement that was achievable but committed.
The issues covered in the document raised good points to be covered in the agreement.
Decided to buy Net Lawman document because it was low fee and appeared to provide for in-family agreement that was achievable but committed.
The issues covered in the document raised good points to be covered in the agreement.
Giselle Dawson
Review of the Australian version
An easy to understand document written in plain English with helpful explanatory notes. Excellent value for money, I had an online solicitor estimating a fee of £650 plus VAT for something that cost me £9 from Net Lawman. Very happy with the document and service.
Julie Clarke
Review of the United Kingdom version
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