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LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement")

BETWEEN:

____________________ of ______________________________________
(the "Lender")

OF THE FIRST PART

AND

____________________ of ______________________________________
(the "Borrower")

OF THE SECOND PART

IN CONSIDERATION OF the Lender loaning certain monies (the "Loan") to the Borrower, and the Borrower repaying the Loan to the Lender, the parties agree to keep, perform and fulfil the promises and conditions set out in this Agreement:

Loan Amount & Interest
The Lender promises to loan $____________________NZD to the Borrower and the Borrower promises to repay this principal amount to the Lender, without interest payable on the unpaid principal, beginning on 22 January 2025.
Payment
This Loan will be repaid in consecutive monthly instalments commencing on 22 January 2025 and continuing on the twenty-second of each following month until 22 January 2025 with the balance then owing under this Agreement being paid at that time.
At any time while not in default under this Agreement, the Borrower may make lump sum payments or pay the outstanding balance then owing under this Agreement to the Lender without further bonus or penalty.
Default
Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing under this Agreement at that time to be immediately due and payable.
Governing Law
This Agreement will be construed in accordance with and governed by the laws of New Zealand.
Costs
The Borrower shall be liable for all costs, expenses and expenditures incurred including, without limitation, the complete legal costs of the Lender incurred by enforcing this Agreement as a result of any default by the Borrower and such costs will be added to the principal then outstanding and shall be due and payable by the Borrower to the Lender immediately upon demand of the Lender.
Binding Effect
This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.
Amendments
This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.
Severability
The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
General Provisions
Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
Entire Agreement
This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

IN WITNESS WHEREOF, the parties have duly affixed their signatures

SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

_____________________________
____________________

SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

_____________________________
____________________

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Loan Agreement Document Preview

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Last Updated December 30, 2024

What is a Loan Agreement?

A Loan Agreement, also known as a term loan, demand loan, or a loan contract, is a contract that documents a financial agreement between two parties, where one is the lender and the other is the borrower.

This contract specifies the amount of the loan, any interest charges, the repayment plan, and payment dates. A written contract gives both the borrower and lender a clear outline of the terms of the loan.

A Loan Agreement may be either secured or unsecured.

Secured: A secured loan is one that is issued and supported with collateral to be used in the event that the borrower can no longer make payments. Collateral is usually a physical asset that can be seized and/or sold off by the lender to pay the remaining balance of the loan. Collateral can be a car, a house, stocks, or bonds.

If there isn't a collateral clause in the contract, the lender would have to go to court to seize any of the borrower's assets. With a clause in place, the lender may still have to go to court to seize on the collateral, but the process tends to run smoother.

Unsecured: An unsecured loan is one that is issued without collateral. These kinds of loans tend to be more common when loaning money to friends or family members. An unsecured loan may have higher interest rates to offset the risks to the lender for loaning money without collateral.

What can you use a Loan Agreement for?

What does a Loan Agreement include?

To write a loan agreement, you should generally include information about:

The location. People usually choose the lender's location for the Loan Agreement, but if the agreement is for the purchase of assets, then the parties might choose to list the location of the assets instead.
The lender and borrower. These details include name, address, and whether the lender or borrower is an individual or a corporation. You may also add a co-signer who agrees to pay the debt if the borrower defaults on the loan.
The loan amount. The amount of money being lent to the borrower is the loan amount.
Interest and late fees. If the lender charges interest, they may specify the percentage of interest and how it's compounded. The lender may also penalize overdue payments by charging late fees or increasing the interest rate.
Repayment method. The borrower may repay the loan in a single payment, regular payments, or as otherwise agreed. The agreement should outline the repayment schedule, when the final amount is due, and if the borrower can repay the loan early or in lump sums.
Collateral and insurance. The borrower may secure the loan with collateral such as a vehicle, equipment, or jewellery. In this case, the lender may seize the collateral if the borrower cannot repay the full loan amount. The lender may also require the borrower to obtain insurance if using the loan to buy a vehicle.

How do I create a debt repayment plan?

LawDepot's Loan Agreement template allows you to choose from the following methods of repayment:

Single repayment: The borrower repays the entire loan amount at once (either by a specific date or upon notice to repay).
Regular payments: The borrower repays the loan in weekly, monthly, or yearly instalments.
Other: Specify a non-traditional method of payment, such as allowing the borrower to make payments as they are able.
Early repayment: In addition to the specified payment schedule, the borrower may make lump sum payments at any time in order to repay the loan early.
Interest: The lender may charge interest at a certain percentage rate that compounds every month, six months, or year. If the borrower fails to make a payment on time, the lender may increase the rate of interest or charge a late fee.

Should I charge interest in the Loan Agreement?

Interest is a way for the lender to charge money on the loan and compensate for the risk involved with the transaction.

You may choose to begin charging interest or increase the interest rate if the borrower fails to make a payment on time. The increased interest provides you with additional compensation for the borrower's failure to pay as promised and the trouble of having to enforce the Loan Agreement.

What happens if the borrower or lender dies before repaying the loan?

If the borrower dies before paying off the loan, authorities will use their assets to pay the remainder of the debt. If there is a co-signer, the responsibility for the debt falls to them.

If the lender dies before receiving the complete repayment, the borrower owes to the lender’s estate. In this case, the beneficiaries of the lender’s estate will collect the remainder of the debt.

If the loan is for a significant amount, it’s important that you update your Last Will to specify how you want to deal with the outstanding loan upon your death.

Related Documents:

Demand Letter: Request payment from a party in default.
Bill of Sale: Document the transfer of ownership of an item from a seller to a buyer.
Promissory Note: Simpler than a Loan Agreement, a Promissory Note is an enforceable promise for a borrower to pay back a loan to a lender.

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Page of

LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement")

BETWEEN:

____________________ of ______________________________________
(the "Lender")

OF THE FIRST PART

AND

____________________ of ______________________________________
(the "Borrower")

OF THE SECOND PART

Loan Amount & Interest
The Lender promises to loan $____________________NZD to the Borrower and the Borrower promises to repay this principal amount to the Lender, without interest payable on the unpaid principal, beginning on 22 January 2025.
Payment
This Loan will be repaid in consecutive monthly instalments commencing on 22 January 2025 and continuing on the twenty-second of each following month until 22 January 2025 with the balance then owing under this Agreement being paid at that time.
At any time while not in default under this Agreement, the Borrower may make lump sum payments or pay the outstanding balance then owing under this Agreement to the Lender without further bonus or penalty.
Default
Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing under this Agreement at that time to be immediately due and payable.
Governing Law
This Agreement will be construed in accordance with and governed by the laws of New Zealand.
Costs
The Borrower shall be liable for all costs, expenses and expenditures incurred including, without limitation, the complete legal costs of the Lender incurred by enforcing this Agreement as a result of any default by the Borrower and such costs will be added to the principal then outstanding and shall be due and payable by the Borrower to the Lender immediately upon demand of the Lender.
Binding Effect
This Agreement will pass to the benefit of and be binding upon the respective heirs, executors, administrators, successors and permitted assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest, and notice of protest.
Amendments
This Agreement may only be amended or modified by a written instrument executed by both the Borrower and the Lender.
Severability
The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
General Provisions
Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
Entire Agreement
This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

IN WITNESS WHEREOF, the parties have duly affixed their signatures

SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

_____________________________
____________________

SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

_____________________________
____________________

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Loan Agreement

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Your Loan Agreement

What is a Loan Agreement?

What can you use a Loan Agreement for?

What does a Loan Agreement include?

How do I create a debt repayment plan?

Should I charge interest in the Loan Agreement?

What happens if the borrower or lender dies before repaying the loan?

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Your Loan Agreement