What Should Be Included in A Loan Agreement Letter?

In the business world, a loan agreement letter has a very important role. In this letter, all the terms between the borrower and lender will be written in detail. This agreement letter is often used for personal loans, real estate, students, and business loans. Among several parties, companies and banks often use this format. If you want to write a good agreement letter, then you must notice several relevant things.

Is It Important To Write An Agreement Letter for Loan?

The loan agreement is an important official document because it contains an agreement between the borrower and the lender. It can be done verbally, but a written agreement is stated to be more effective and efficient, and there is a signature from both parties.

The loan agreement contains some important information such as the names of the parties, the date when the loan starts, the loan amount, interest rates, payment terms, details of the guarantee or collateral.

How To Write An Agreement Letter?

To write a good loan agreement letter, you have to include several important elements such as the identity of the two parties, the date of the agreement, the loan amount, interest rates, payment terms, signature, choice of law, separation, and the entire agreement.

The content of your agreement letter must follow a legal contract, explain the financial obligations of both parties, how many loans are given, and the amount of the loan that must be returned.

Loan Agreement Letter Example

In writing a letter of agreement, you have to pay attention to several important aspects of the letter. Below is an example of a letter that you can use as an inspiration.

Dear Ms. Rachel,

After reviewing your application, we agree to approve your $ 8,000 loan request. We also want to thank you for your trust in running a business with us in the past and hopefully, you will be blessed with success in your new business. Please review the terms of this agreement below and don’t hesitate to ask if there are several things to be questioned.

The Independent Financial Generous Institution, as the lender, will provide a loan of $ 8,000 to Excellent Company, as the borrower. The borrower has agreed to pay back the loan with interest at $ 660 in monthly installments from January 14, 2021, to January 14, 2023. The loan will be disbursed on December 14, 2020, and repayment will begin via transfer to account # 4444477777-2.

Promise To Pay: The borrower promises to pay off the debt and interest within two years of the loan.

An online business account will be provided when this letter has been signed. The terms can be reconsidered three months after this agreement is approved.

Thank you for your attention.



Jonathan Jackson

Business Accounts Manager

Independent Financial Generous

(777) -7777-777

I have understood and agreed to the contents of this agreement. I will pay the amount I borrowed according to the terms of the agreement and the terms listed above.



Lily Rachel



Excellent Company

December 10, 2020

That’s all our short explanation about a loan agreement letter. By reading a brief description and sample above, we hope you can get a new and fresh idea.



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