Setting up a Loan Agreement Between Friends and Family

Last updated on March 9, 2023 / By 

If you are considering setting up a loan agreement with a friend or family member, it is important to make sure that both parties are clear on the terms of the loan and that it is documented in writing. 

Here are some steps you can follow to set up a loan agreement between friends and family:

  1. Determine the amount of the loan and the purpose of the loan. Be sure to discuss and agree upon the terms, including the interest rate (if any), the repayment schedule, and any collateral that may be required.

  2. Write up a loan agreement. This should include the details of the loan, such as the amount, interest rate, repayment schedule, and any collateral. Be sure to include the names and contact information of the borrower and lender, as well as the date the agreement was signed.

  3. Have the loan agreement reviewed by a lawyer. It is a good idea to have a legal professional review the agreement to ensure that it is fair and legally binding.

  4. Sign the loan agreement. Both parties should sign the agreement and keep a copy for their records.

  5. It is important to remember that a loan agreement is a legal contract and should be treated as such. Be sure to carefully consider the terms of the loan and make sure that both parties are comfortable with the agreement before signing.

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