Loan Agreement

What this is

A loan agreement between individuals or businesses - amount, interest, repayment schedule, security or guarantee, default, prepayment and recovery - drafted so the lender's money and the borrower's terms are both protected. It is for friends and relatives lending money, businesses lending to or borrowing from directors, partners or other businesses, and anyone lending outside a bank. Our panel advocate drafts and reviews the agreement and delivers it signed on letterhead; stamping and registration of any mortgage are separate steps we explain.

What you get

A loan agreement drafted, reviewed and signed by our panel advocate on letterhead, covering the lender and borrower, principal and disbursement, interest and its computation, repayment schedule with a table, prepayment, security or guarantee, events of default and acceleration, default interest within lawful limits, recovery rights including cheques or promissory note held, representations, notices, governing law and dispute resolution, with a repayment schedule and, where a guarantor is involved, the guarantee terms. Delivered ready for execution, with a note on stamp duty, on the registration needed if property is mortgaged, on TDS on interest, and on state money-lending laws where they apply. Stamp duty and registration charges are not included.

How it works

1. 1Tell us the loanWho is lending to whom, how much, at what interest, and how it is repaid. Upload any proof of disbursement or a term sheet.
2. 2Confirm the termsRepayment schedule, security, guarantor, default and prepayment.
3. 3Answer the advocate's questionsWhether the money has already been given, whether security is offered, whether the lender lends regularly, and whether cheques or a promissory note are being taken.
4. 4PayPay the fee.
5. 5Advocate drafts and signsOur panel advocate drafts the agreement and signs it on letterhead.
6. 6Agreement is deliveredYou receive the agreement for execution, with the stamping, registration and tax note.

What to have ready

• ID and PAN of every partyAadhaar and PAN of each person signing; incorporation documents if an entity.
• Proof of disbursement (if you have it)Bank statement, transfer screenshot, cheque copy, if already paid.
• Term sheet, chat or email recording the agreed terms (if you have it)If any.
• Security documents (if you have it)Property title, share statement, vehicle RC, cheque copies.
• Guarantor's ID and address proof (if you have it)If a guarantor is involved.
• Board resolution (if you have it)If a company is lending or borrowing.

What this is based on

• Contract Act 1872 (1872)
• Limitation Act 1963 (1963)
• NI Act 1881 (1881)
• RBI Master Directions
• state Stamp Act
• Companies Act 2013 (2013)