Loan Agreement - Short Form

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Uncomplicated loan letter to be used in the UK when lending money. This loan letter documents the terms of the loan in a clear and concise way.

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This is an uncomplicated lawyer prepared UK Loan Agreement sometimes also known as a loan letter. A Loan Agreement is used when lending money. It is vital that if you ever loan or borrow money that you document the main terms under which the money is lent.

Some of the terms which have been documented in this form in a clear and concise way are:
  • How much money is being loaned
  • When will the loan be repaid
  • What is the interest rate (if any)
  • When will the interest be paid
  • Will the loan be secured by a mortgage, debenture or personal guarantee or not at all
This Loan Agreement form has been created by UK lawyers for use in England and Wales.
Number of Pages5
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#32253
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.











SIMPLE LOAN LETTER







This Packet Includes:
1. Information;
2. Step-by-Step Instructions; and
3. SIMPLE LOAN LETTER





Information
SIMPLE LOAN LETTER




This is an uncomplicated loan letter to be used when lending money.

It is vital that if you ever loan or borrow money that you document the main terms under which the money is lent. They are:

   How much money is being loaned

   When will the loan be repaid

   What is the interest rate (if any)

   When will the interest be paid

   Will the loan be secured by a mortgage, debenture or personal guarantee or not at all

As with all our agreements this loan letter is prepared in simple and easily understood language. Obviously not all the clauses will be required for your individual circumstances but this letter agreement will act as a good foundation for your negotiations.

In this letter you will see some wording within square brackets giving you instructions as to what information needs to be inserted. Once you have inserted this information the delete the square brackets.

You will also note just blank square brackets in the letter. This denotes that information is missing and will need to be inserted by you. Once you have added the information then delete the square brackets.

We would draw your attention to the following:

This loan letter has been drafted on the basis that the money can be lent either to a company or an individual. Please note there is difference as explained below.



If money is being loaned to a company then you must delete all the provisions relating an individual. If money is being loaned to an

individual then you must delete all provisions relating to a company.

Within the loan letter you will see clearly these different provisions.


 Step-by-Step Instructions
SIMPLE LOAN LETTER



   

Top   Perhaps obvious but make sure the Lender writes the letter on his headed note paper and that the letter is addressed to the Borrower and dated.

   1st Paragraph   In this paragraph you will need to enter the amount of the loan.

   2nd Paragraph   With respect to when the loan will be repaid you have two choices. Either the Lender will require the loan to be repaid on a specific date or the loan can be repaid when the Lender demands it (like an overdraft at a bank). Ensure that you delete the option you choose not to use.

   3rd Paragraph   In this paragraph state what interest rate the Lender will charge on the loan. If interest is not going to be charged then state that the loan will be free of interest.

   4th Paragraph   If the loan is going to be secured by a mortgage, debenture or personal guarantee then state so here. If the loan will not be secured then just delete the superfluous wording.

   9th Paragraph   Please make sure you delete the company or individual references that are not needed.





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SIMPLE LOAN LETTER


[Lenders letter head note paper]


 

[Name and address of borrower]

[Date]

Dear [Borrower]

I am/We are pleased to make available to you a loan in the principal sum of £[   ] on the terms and conditions of this letter.  Subject as provided below, you may draw the loan in one or more amounts on not less than 3 business days written request to me/us, but so that no drawing may be made after [         ] 20[   ].

You will repay the loan together with interest on it [on[      20  ]][at any time forthwith on demand]. You may repay the loan or any part of it early but may not re-borrow any amount so repaid.

The principal amount of the loan outstanding from time to time will carry interest [at the rate of [      ] per cent per annum] [above the base rate as varied from time to time of [      ] Bank plc] [subject to a minimum of [      ] per cent per annum] accruing daily and payable [quarterly] in arrears [at the end of March, June, September and December in each year].  However if you default in the payment or repayment on the due date of any sum from time to time due under this letter, interest will accrue on a daily basis (payable on demand) on the amount in respect of which default has been made from the date of default until actual payment (both before and after judgment) at the rate of [5] per cent per annum above [      ] Bank plc base rate as varied from time to time.

[The loan will be unsecured.][The loan will be secured by [           ] in such form which is acceptable to us.]

You will make all payments under or in respect of this facility for value on the due date in pounds sterling to us to such bank account as we may from time to time instruct you in writing.  If any payment becomes due on a day which is not a day on which banks are generally open for business in London, the due date of such payment will be extended to the next business day.  You will make all payments under or in respect of this facility without set-off or counterclaim and free and clear of any withholding or deduction for or on account of tax, save as may be required by law, provided that if you are required to make such a deduction or withholding you will pay to me/us such amount as will after such tax has been deducted or withheld be the same amount as I/we would have been entitled to receive in the absence of the tax deduction or withholding.

[Either, in the case of a borrower which is the company:

Notwithstanding the above provisions of this letter, the loan and all interest on it will become due and payable or repayable forthwith on demand by me/us (i) you fail to pay any sum under this letter when due or you are [or any third party giving such security is] in breach of any other provision of this letter [or the security referred to above]; or (ii) you are in default under any other financial obligation to any person; or (iii) an administration order is made in relation to you or a receiver or manager or administrative receiver is appointed of you or any of your assets or you enter into liquidation; or (iv) any petition is presented, any resolution is proposed or any other steps or proceedings are taken which may lead to any such occurrence referred to in (iii) above; or (v) any distress or execution is levied on or affects any of your property or assets; or (vi) you are or are deemed to be insolvent or unable to pay your debts; or (vii) you cease to carry on business.]

[OR, in the case of a borrower who is an individual:

Notwithstanding the above provisions of this letter, the loan and all interest on it will become due and payable or repayable forthwith on demand by me/us if (i) you fail to pay any sum under this letter when due or you are [or any third party giving such security is] in breach of any other provision of this letter [or the security referred to above]; (iii) you are in default under any other financial obligations to any person; or (iii) you become bankrupt or you make or seek an arrangement with your creditors or an interim order is made  under section 252(1) of the Insolvency Act 1986 in relation to you; or (iv) any distress or execution is levied on or affects any of your property or assets; or (v) you die; or (vi) by reason of illness or incapacity you become incapable of managing your own affairs or you become a patient under any mental health legislation.]

You will pay, on demand an on a full indemnity basis, all cost and expenses (and VAT) which I/we may from time to time incur in connection with this letter and/or the loan.

[Any demand or notice in respect of this letter and/or the loan will be in writing and (without prejudice to any other effective means of serving it) may be served on you personally or by post and either by delivering it [to any of your officers at any place or by despatching it addressed to you at your registered or principal office for the time being or any of your places of business last know to us] [OR, if the borrower is an individual: to you or your personal representatives at the place last known to us as your usual abode or place of business].  Any such demand or notice delivered personally shall be deemed to have been received at the opening of business on the first working day following the day on which it was posted, even if returned undelivered.]


Time shall be of the essence in respect of your obligations under or in respect of this facility but no failure by us to exercise or delay by us in exercising any right or remedy under or in respect of this facility shall operate as a wavier of it, nor shall any single partial or defective exercise by us of any such right or remedy preclude any other or further exercise of that or any other right or remedy.

This letter is governed by English law.

To accept the terms and conditions of this letter, please sign and return the enclosed copy within 14 days from todays date, failing which this letter will lapse and the loan will not be available to you.

Yours faithfully





For and on behalf of the  [Lender]





Agreed and accepted

Date [         ]





For and on behalf of the [Borrower]

You've found your form, but will you need others? If there are other related forms you may need in the future, it may be beneficial to look at our combo packages. On average, customers who purchase a combo package save 40% on the related forms they need. Take a look at the combo packages below to see if one is right for you.
Loan Agreement - Combo Package (UK) Get 2 forms for just £14.95 Save 40%! Best Value! Save Money by getting our very popular UK Loan Forms together in one convenient packet Borrowing Lending Premier Combo Package (England and Wales) Get 4 forms for just £16.95 Save 54%! This Borrowing Lending Premier Combo Package is created for use in England and Wales. This combo package is available for immediate download.

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CA

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I am very happy with this purchase. The description of the document matched my requirements and it was simple to add or subtract clauses to exactly suit my needs.


Palm Desert,

CA

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It was exactly what was needed to create a valid loan agreement, and so easy to obtain. Many thanks, Terence Allsep


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CA

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Palm Desert,

CA

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I am a pensioner and needed a comprehensive loan agreement applicable to Australia, without incurring the cost of a dedicated solicitor. Your agreement was exactly what I was looking for and @ $14.95, excellent value for money. It would be better if your site and forms were easier to find. I visited a number of sites, most USA format, before I found yours.


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