Template Personal Loan Agreement Between Friends
Private loan contract – For most loans from one individual to another. The loan agreement should clearly state how the money is repaid and what happens when the borrower is unable to repay. I, Andrew Jones, promise to pay Ben Bradley back the total of $2,500, with a personal check on May 2, 2019. An individual or organization that practices predatory credit by calculating high-yield interest rates (known as a “credit hedge”). Each state has its own limits on interest rates (called “usury rate”) and credit hedges to be illegally calculated higher than the maximum allowed rate, although not all credit sharks practice illegally, but misceptively calculate the highest statutory interest rate. The state from which your loan originates, the state in which the lender`s business is active or resides, is the state that governs your loan. In this example, our loan came from new York State. This personal loan contract should be used in the simplest situations, for example. B if a family member lends money to another or if the money is borrowed from friends or colleagues.
Whenever two friends or close family members have to borrow or do business together, there is always a risk to the relationship. It is understandable that you want to help them because you take care of them, if it is for something like a loan for medical bills, when your heart naturally says to help. But now you`re in a situation. If you find that you have to track down your friend every month to get a payment, and they are not as sincere as you originally thought, the relationship may be damaged. You start to take a different perspective from that person from a business point of view. This can cause considerable damage to a relationship. I, Andrew Jones, on April 2, 2019, borrowed $2,500 from Ben Bradley. I will repay the loan in a lump sum if I receive my income tax refund For private loans, it may be even more important to use a loan contract. For the IRS, money exchanged between family members may look like either gifts or credits for tax purposes. This agreement was signed and dated to date ☐ the loan is secured by security. The borrower accepts that the loan until the full payment of the loan by – There are free models for loan contracts between friends and family.
On the other hand, if payments are made for the repayment of the loan, please provide a detailed description of the repayment plan, including the start and end date of payment and the amount of each payment. Depending on the amount of money borrowed, the lender may decide to have the agreement approved in the presence of a notary. This is recommended if the total amount, the capital plus interest, is more than the maximum acceptable rate for the small claims court in the jurisdiction of the parties (usually 5,000 usd or 10,000 USD).