Loan agreement: person to person; secured by guarantee

This loan agreement for situations where both the lender and the borrower are individuals, and where the loan is secured by a guarantee by another person.

It is likely to be used for loans to friends and arms length business deals.

Suitable for use in: England & Wales and Scotland
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About this document

A guarantor is a common form of security when the borrower does not own assets of sufficient value to provide an incentive to repay the loan on time and in full.

This agreement is suitable in situations where the lender, the borrower and the guarantor are all individuals - most likely when the borrower is a friend, distant relative or business partner of the lender. The guarantor could have any relationship to the borrower.

The purpose of the loan does not affect the terms of the agreement. For example, it could be used for:

  • a deposit on a house or flat

  • starting or financing a business

  • part purchase of a car or other high value item

  • repayment or consolidation of other debts

  • paying for a wedding party or other event

Either or both parties may be in the UK or abroad.

Similar agreements

If the parties have a high level of trust, we have another agreement suitable for friends or family members to use.


  • Structure of the loan

  • Alternative draw down arrangements

  • Provision of information to lender

  • Repayment and interest payment arrangements

  • Provision for default situations

  • Guarantor liability

  • Borrower's warranties

  • Other important legal points


This document was written by a solicitor for Net Lawman. It complies with current English law.

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