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Loan agreement format: what to include
A short written agreement turns a casual loan into a clear, on-the-record arrangement — protecting both sides and the relationship. Here's what a simple loan agreement should contain, with a checklist you can follow.
Why put a loan in writing
Memories differ, especially months later. A written agreement records exactly what was agreed — the amount, the interest, and when it's due — so there's nothing to dispute. Even between family or friends, a one-page note signed by both is far better than a verbal "we'll sort it out."
What a loan agreement should include
- Parties — full names and addresses of the lender and the borrower.
- Amount — the principal, in numbers and words, and the date it was given.
- Interest — the rate, whether it's per month or per year, and whether it's flat or on the reducing balance (or clearly "interest-free").
- Repayment — the schedule: a single due date, or monthly/weekly/daily installments, with amounts.
- Mode — how repayments will be made (cash, bank transfer, UPI).
- Late/default terms — what happens if a payment is missed (if anything is agreed).
- Signatures & date — both parties sign and date it.
- Witnesses — one or two witnesses add weight.
Example wording for each clause
| Clause | Example wording |
|---|---|
| Parties | "This agreement is between [Lender name, address] ('Lender') and [Borrower name, address] ('Borrower')." |
| Amount | "The Lender has lent ₹1,00,000 (one lakh rupees) to the Borrower on [date]." |
| Interest | "Interest is payable at 1.5% per month on the outstanding balance (reducing)." |
| Repayment | "The Borrower will repay in 12 monthly installments of ₹[amount], due on the [n]th of each month." |
| Default | "If a payment is more than [n] days late, [agreed consequence]." |
| Signatures | "Signed by both parties on [date], in the presence of the witness(es) below." |
Stamp paper & witnesses
In India, loan agreements are often executed on stamp paper of the applicable value and signed before witnesses; the exact stamp duty varies by state. A promissory note is a simpler alternative for straightforward loans. Check what's appropriate where you are — and when in doubt, ask a professional.
How LendBook generates a print-ready agreement
LendBook includes an offline agreement generator: enter the loan details and it produces a clean, print-ready document to sign on paper or stamp paper. It pulls the figures straight from the loan you recorded, so the amount, interest and schedule match your book exactly — and you can generate an addendum when you top up a loan. The signed copy is saved to that borrower's documents.
Note: This is general information, not legal advice. You're responsible for the accuracy, legality and enforceability of any document you create; consult a qualified professional where appropriate.
Generate an agreement from your loan
Record the loan once, then produce a print-ready agreement that matches it exactly.
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