Friends and Family Loan Agreement

SKU 00008
R299.00
In stock
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Product Details
  • R299.00 buy template only.
  • R899.00 buy template with legal review.

This is a simple loan agreement suitable for lending to friends or family. It is intended to make clear to the borrower that the arrangement is “for real” and that the lender intends that the money should be repaid on time as agreed. It is ideal for lending in situations such as large one-off purchases, funding of events, and consolidation of other debts.

Attorney approved Practical points considered

Not using a written agreement can result in confusion about when the money should be repaid and with or without interest, or a loan could be mistaken as a gift, either by the borrower or other family members or friends.Lending to friends and family can be difficult.

A written agreement may seem too formal - especially if it is written in a legalistic style. It may prompt the borrower to question your relationship and whether you trust him or her.

This loan agreement is a simple agreement that aims to bridge the gap between not using an agreement at all, and using a longer, more comprehensive one.

When to use this agreement

This is a simple agreement. It contains no provisions for security or for a guarantor.

However, it is a legally binding document and you can take action against the borrower if he or she doesn't pay you on time, or uses the loan for a reason not agreed.

Use this agreement when you need to record the loan, but where you have a high level of trust with the borrower.

It is suitable for situations such as:

  • lending to a friend to buy a car or other high-priced item
  • lending to a child for a house deposit
  • lending to a child to fund a wedding
  • Either party may be abroad or in the Republic of South Africa, and the loan can be of any size.

The law in this document

There is little specific statutory law relating to personal lending, so you are free to agree the terms you want with the borrower.

Drawn outside the National Credit Act 2005, this agreement is not suitable for companies in the business of lending or providing credit to consumers.

The contents of the agreement

  • Definition and purpose of the loan
  • Sum of the loan and advances
  • Repayment conditions
  • Interest payable
  • Miscellaneous legal matters

Draftsman

This document was written for Agreements.org by a Senior Attorney (Admitted in the High Court) with more than 15 years’ experience. It complies with current South African law.

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