Sample of Loan Agreement

A loan agreement is a legal document that outlines the terms and conditions of a loan between a lender and a borrower. It is essential to have a loan agreement in place to ensure that both parties understand their obligations and expectations. In this article, we will provide a sample of a loan agreement and discuss the different sections of the agreement.

Sample of Loan Agreement

[Insert Date]

Loan Agreement

This loan agreement (the «Agreement») is made and entered into as of the date written above by and between [Insert Lender`s Name], a [Insert Lender`s State of Incorporation] corporation with its principal place of business at [Insert Lender`s Address] («Lender»), and [Insert Borrower`s Name], a [Insert Borrower`s State of Incorporation] corporation with its principal place of business at [Insert Borrower`s Address] («Borrower»).

1. Loan Amount

Lender agrees to lend to Borrower the sum of [Insert Loan Amount] (the «Loan») pursuant to the terms and conditions of this Agreement.

2. Interest Rate

The interest rate on the Loan shall be [Insert Interest Rate] per annum, compounded [Insert Compounding Frequency].

3. Repayment

Borrower shall repay the Loan to Lender in [Insert Repayment Terms] installment(s), with the first payment due on [Insert Due Date]. Each installment payment shall consist of principal and interest in the amounts set forth in the amortization schedule attached hereto as Exhibit A.

4. Prepayment

Borrower may prepay the Loan in whole or in part at any time without penalty.

5. Security

The Loan shall be secured by [Insert Collateral Information].

6. Representations and Warranties

Borrower represents and warrants to Lender as follows:

a. Borrower is duly organized, validly existing, and in good standing under the laws of its state of incorporation.

b. Borrower has the power and authority to enter into and perform its obligations under this Agreement.

c. The execution, delivery, and performance of this Agreement by Borrower have been duly authorized by all necessary action on the part of Borrower.

d. This Agreement constitutes a legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with its terms.

7. Events of Default

The occurrence of any of the following events shall constitute an event of default under this Agreement:

a. Failure to make any payment of principal or interest when due.

b. Failure to comply with any term or condition of this Agreement.

c. The insolvency or bankruptcy of Borrower.

8. Remedies

Upon the occurrence of an event of default, Lender shall have the right to exercise any and all remedies available to it under applicable law, including but not limited to acceleration of the Loan, foreclosure on the collateral, and appointment of a receiver.

9. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the state of [Insert Governing Law].

10. Entire Agreement

This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between the parties hereto relating to the subject matter hereof.

In conclusion, a loan agreement is an important legal document that should be carefully considered and drafted. The sample loan agreement provided above illustrates some of the key terms and conditions that should be included in a loan agreement. It is important to consult with legal and financial professionals to ensure that your loan agreement is comprehensive and enforceable.


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