Friendly Loan Agreement Format

This document outlines the terms of a friendly loan between [Lender’s Name] and [Borrower’s Name]. A friendly loan is an informal agreement between friends or family members to lend money without formal legal procedures. This agreement aims to clarify the terms and ensure mutual understanding.

1. Loan Amount and Purpose
The total amount of the loan is [Loan Amount]. The purpose of this loan is [Purpose of Loan]. The borrower agrees to use the funds specifically for this purpose.

2. Repayment Terms
The borrower agrees to repay the loan in [Number of Installments] installments. Each installment will be [Amount of Each Installment], and payments will be due on the [Due Date] of each month. The first payment is due on [Start Date].

3. Interest Rate
The loan will [Specify Interest Rate or State "No Interest"]. If there is an interest rate, it will be [Interest Rate] percent per annum, calculated on the outstanding balance.

4. Late Payment
In the event of a late payment, the borrower will be subject to a late fee of [Late Fee Amount]. If the borrower misses more than [Number of Missed Payments] consecutive payments, the lender may demand full repayment of the remaining balance.

5. Early Repayment
The borrower may repay the loan early without penalty. Early repayment will reduce the total amount of interest paid.

6. Default
If the borrower fails to make the payments as agreed, the lender has the right to seek repayment through informal means, including discussion and negotiation. In the case of unresolved disputes, the lender may consider further actions.

7. Record Keeping
Both parties agree to keep a record of all payments made and received. The lender will provide receipts or documentation of each payment.

8. Amendment
Any changes to this agreement must be made in writing and signed by both parties. Verbal changes are not considered valid.

9. Dispute Resolution
Any disputes arising from this agreement should first be addressed through discussion. If a resolution cannot be reached, mediation may be sought. The agreement shall be governed by the laws of [Jurisdiction].

10. Signatures
Both parties agree to the terms outlined in this document. This agreement is effective as of [Date].

Lender:
Signature: ________________________
Name: [Lender’s Name]
Date: ___________________________

Borrower:
Signature: ________________________
Name: [Borrower’s Name]
Date: ___________________________

Witness (Optional):
Signature: ________________________
Name: [Witness’s Name]
Date: ___________________________