If you`re planning to lend or borrow money from an individual in India, it`s important to have a written loan agreement in place. A loan agreement is a legal document that outlines the terms and conditions of the loan, including repayment terms, interest rates, and any other relevant details. In this article, we`ll discuss the key elements of a loan agreement between individuals in India and provide a sample loan agreement in word format.
Key Elements of a Loan Agreement Between Individuals in India
1. Loan Amount and Purpose: The loan agreement should state the amount of money being borrowed and the purpose of the loan. Both parties should agree upon the loan amount and the specific use of the funds.
2. Interest Rate and Repayment Terms: The loan agreement should detail the interest rate charged on the loan and the repayment terms, including the frequency of payments (e.g., monthly, quarterly, or annually) and the duration of the loan. It`s important to be clear about the repayment schedule to avoid any confusion or misunderstandings.
3. Collateral: If the loan is secured by collateral, such as property or securities, it should be clearly stated in the loan agreement.
4. Governing Law and Jurisdiction: The loan agreement should specify the governing law and jurisdiction in case of any disputes between the parties.
5. Signatures and Date: The loan agreement should be signed and dated by both parties to indicate their agreement to the terms and conditions.
Sample Loan Agreement Between Individuals in India (Word Format)
Loan Agreement
THIS LOAN AGREEMENT (“Agreement”) made on the _____ day of ___________ 20__, between [Name of Lender], residing at [Address of Lender], (“Lender”) and [Name of Borrower], residing at [Address of Borrower] (“Borrower”).
1. Loan Amount and Purpose
The Lender agrees to lend to the Borrower the sum of INR [Insert Loan Amount] (the “Loan”) solely for the purpose of [Insert Purpose of Loan].
2. Interest Rate and Repayment Terms
The Borrower agrees to repay the Loan to the Lender, with interest of [Insert Interest Rate]% per annum, beginning on the ___ day of ___________ 20__. The Loan shall be repayable in _______ instalments of INR [Insert Instalment Amount] each.
3. Collateral
The Loan shall be unsecured, and no collateral is required.
4. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of India. Any disputes arising out of or in connection with this Agreement shall be subject to the exclusive jurisdiction of the courts of [Insert Jurisdiction].
5. Signatures and Date
This Agreement shall become effective as of the date first above written. It has been executed by the parties hereto on the date and year first above written.
Lender: _________________________________
Borrower: _______________________________
