Loan agreement

Person to person; property purchase
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Document overview

Use this document to lend money to family or friends for the purpose of helping to buy a house or flat, or for a renovation project.

The loan can optionally be secured on a guarantee by a third party.

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  • England & Wales
  • Scotland
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  • Length:8 pages (1800 words)
  • Available in:
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About this document

Use this agreement to record a loan where the money will specifically be used to buy, renovate or refurbish a property. It can be used for lending to one or more people jointly.

Even when you trust the person to whom you are making the loan to repay you in full and on time, with such a large amount being lent, you should record the agreement in writing. By using this document, you should avoid confusion about whether the money was a gift or a loan, when the money should be repaid and with how much interest.

The agreement includes the option for a third party, such as another family member or a company to guarantee the debt.

It is suitable for situations such as:

  • lending to a family member and his or her partner to use as a deposit for a house or flat

  • lending to a family member to pay off a mortgage

  • lending to a friend for property renovations

Either party may be abroad or in the UK, and the loan can be of any size.

Alternatives

If you would prefer to use a simpler agreement, see loan agreement template for lending to friends and family members.

Unfortunately we are not able to sell a document that secures the debt against the property - such a charge is a restricted activity under law and requires a solicitor. Additionally, in many cases, doing so would break the terms of any mortgage agreement.

If the borrower has other assets, such as a share portfolio or possessions of value, you may like to use these as security instead.

Contents

  • Definition and purpose of the loan

  • Relationship and status of the borrowers

  • Borrowers' warranties

  • Sum of the loan and advances

  • Repayment conditions

  • Interest payable

  • Early repayment

  • Method of payment

  • Provisions covering default (non-repayment)

  • Assignment (transfer of obligations to repay)

  • Guarantor and guarantee

  • Miscellaneous legal matters

Sample loan agreementSample page from the property loan agreement

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Recent reviews

Peace of Mind Gained
07 October 2023
The initial document was clear and understandable but did not exactly fit our needs. However we amended it as best we could, then decided to use your review service to make sure it was still legal and to clarify some uncertainties. The reviewer was excellent, very fast and helpful, and within a couple of days we had a document which was ideally suited to our needs. Overall, we felt that the price paid was excellent value.
John Buckingham
Simple and helpful
25 June 2014
Simple and straightforward.Needed a clear easy to edit doc to help me draft an agreement - did the job
Thanks
Bob Dudley

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