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Unsecured Loan: Individual to Individual

Unsecured Loan: Individual to Individual
Document Type: Microsoft Word
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When lending money to anyone it is important to have evidence of the loan and its terms. By having a Loan Agreement that clearly sets out the basis upon which money has been lent, it becomes easier to enforce the terms on which the loan was made and easier to show that it was in fact a loan and not a gift.

This is an unsecured loan by one individual to another individual. The document provides for a number of options including whether interest is payable or not, and whether the loan is repayable by instalments. If the loan is to carry interest then the interest rate should be inserted. If the loan is to be repaid on a fixed date or on the happening of an event then that date or event should be inserted.

The template also provides an option to include a guarantor. A guarantor is a person who promises to pay and meet all the obligations of the borrower if the borrower fails to pay or meet those obligations. LawLive recommends that you always ask for a guarantee from a second person, usually a relative or close friend of the borrower. It is good practice to check before you agree to lend the money that the guarantor and the borrower both have sufficient assets to enable them to repay you.

PLEASE NOTE: This is an unsecured loan agreement. This means that no collateral has been pledged as a secondary payment source should the borrower default on the loan. If the borrower defaults, you may have to take legal proceedings to recover your loan.

 
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