Unsecured loan agreement: person to person; private or business
An agreement between a lender, who may be an individual or a corporate body, and a borrower, who is a individual person (or a company). The loan is unsecured with no guarantor. Likely to be used for family loan arrangement or loan to director by his own company. Provisions to protect the lender. Options for alternative repayment provisions and lender actions if borrower defaults.
- Solicitor approved
- Plain English makes editing easy
- Guidance notes included
- Money back guarantee
About this unsecured loan agreement
A verbal agreement may be enough to lend small sums to people you trust, but even among family and friends, a formal record of terms will prevent a disagreement later. Where the risk of default is higher, or the arrangement is more complicated, it is essential to record the arrangement in a document like this one.
This unsecured loan agreement is intended for use in a family situation or between two people who know each other well, or to a director by his own company, where security is not required. It may be used for a loan by or to a limited company. If you are the borrower, you have the opportunity to edit any point you would prefer not to include.
An unsecured loan is money lent from one party to another without any collateral to secure its repayment. In most cases, these types of loans are considered somewhat high-risk, since the lender does not usually have any way of forcing the borrower to comply with the terms or make payments on time short of legal action. For this reason, most unsecured loans carry relatively high interest rates and are often only available to those with strong credit scores.
Reasons for Pursuing an Unsecured Loan
Unsecured loans are used primarily for small, short-term expenses, such as medical crises or wedding or funeral costs. The purpose of the loan does not affect the terms. The loan is usually intended to be repaid within about a year, though the terms can vary depending on the amount at issue and the relationship between the lender and the borrower. When a borrower does not have property worth charging, taking an unsecured loan may be his only way of obtaining a loan.
Simplicity is another reason to seek an unsecured loan. When only small amounts of money are at issue, it is not usually worth the hassle of transferring property titles and establishing a collateral relationship. A simple contract can often be the best way to proceed, even if there are negative trade-offs.
There is no limit in law on the interest that the lender charges. We have provided for a greater rate of interest if the borrower falls behind with repayments.
The agreement could be whatever you want to put in it, but we have provided a sound and comprehensive proposal containing options. It is supported by drafting notes so that you will know whether you can safely delete some provision. It is most unlikely that you will want to add new provisions, but if you do, it is easy. Our layout and use of plain English also make it very easy to edit by deletion.
When to use this unsecured loan agreement
The lender and the borrower may be a business or an individual Suitable where a company lends to a director or employee Suitable for personal loans to family and friends Either or both parties may be in the Commonwealth of Australia or abroad Flexible for loans of any size and repayment terms of any complexity
The law in this unsecured loan agreement
There is little statutory regulation relating to an agreement of this nature, so you can make, more or less, the deal you choose.
Drawn outside the National Consumer Credit Protection Act 2009, this agreement is not suitable for companies in the business of lending or providing credit to consumers.
Alternatives to this unsecured loan agreement
Net Lawman offers three documents in this set. Each is available in two versions: one for a company borrower and the other set for a human individual or partnership borrower. All can be for any purpose.
The documents are:
- Unsecured loan agreement: person to person; private or business (this agreement)
- Loan agreement: individual borrower; secured on financial assets
- Loan agreement: private borrower; secured on physical assets
- Loan agreement: company; secured by guarantee
- Loan agreement: person to person; secured by guarantee
- Loan agreement: company; secured on financial instruments
- Loan agreement: company borrower; secured on physical assets; guarantor option
We do not provide a document suitable for charging real property because such work is restricted by law to solicitors and licensed conveyancers.
Contents of this unsecured loan agreement
The contents of the unsecured loan agreement include:
- Structure of the loan;
- Alternative draw down arrangements;
- Provisions of information to lender;
- Repayment and interest payment arrangements;
- Method of payment;
- Provision for default situations;
- Borrower's warranties;
- A round up of legal matters which many draftsmen use to create another ten paragraphs. Here they are in one place and in plain English
This document was written by a solicitor for Net Lawman. It complies with current Australian law.
What other customers thought
Average customer rating
By Andre Dussart 28 January 2017
This was so easy and straight forward, downloading a person to person private loan document which I needed in literally 24 hours. Net Lawman will be my first port of call going forward for straightforward issues I prefer not to take to my personal solicitor. Glad this service is available and highly recommended to anyone. Good guidelines too.
By Wolf Meihack 18 July 2016
Simple language, clear, good quality, plus a slice of basic education in how to draft such agreements, at an astonishingly affordable price. I'll use Net Lawman again when needed, and recommend you to others who require similarly simple and straightforward documents. I always pay a live, local professional for more complex matters. But I would buy one of your documents as 'homework' before the local consultation! (It's that useful.)
By STEVEN NICHOLSON 08 December 2015
I liked being able to fully edit the document to account for the slightly unusual circumstances, rather than being sent a document from a limited template of questions. Easy to use website and document delivered immediately. Good instructions with the document explaining the clauses.
Would recommend to others.
By Andrew Bennett 19 June 2015
By Mike Roache 22 April 2015
Fabulous document. Exactly what I needed at a very reasonable price. I have the confidence that this document is just what I need to enter into a loan agreement with a family member. Great instructions on using the document too.
By Helen Harris 21 April 2015
I love the flexibility, simple language and descriptive agreements that were provided. Quick service, reasonable price. I will use again!
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thought it would be too complicated,but of course it isn't. Your document was quick and easy to get, quick and easy to use and understand. The overall ease of use impressed me most and I will definitely recommend Net Lawman to others.
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Good document at a reasonable price.
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Excellent. Covers all facets and then some.
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Simple and easy to use document template.
By John Lyons 02 March 2014
Both excellent thank you.
By Patricia Zanetti 11 December 2013
Easy to use and edit. Covered all the legal areas needed.
By Mark Hawthorne 10 November 2013
Easy to use ,simple to understand.
By Robert Atcheson 22 September 2013
Great document. Easy to edit and has everything needed.
By James Sayer 26 April 2016
Great template document, easy to amend and use for a variety of circumstances, thank you, will use you again and have no hesitation in recommending you to others. Regards, James.
By John Howie 23 March 2014
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