Loan Agreement Format 2026
LOAN AGREEMENT
(Unsecured loan)
THIS LOAN AGREEMENT is made at {{execution_place}} on 1 October 2026 BETWEEN {{lender_name}}, residing at {{lender_address}}, holding PAN {{lender_pan}}, being an individual not related to the Borrower (hereinafter referred to as the "Lender") of the ONE PART; AND {{borrower_name}}, of {{borrower_address}}, holding PAN {{borrower_pan}} [CIN: ] (hereinafter referred to as the "Borrower") of the OTHER PART.
WHEREAS the Borrower has requested the Lender for a loan for the purpose stated below, and the Lender has agreed to lend the same on the terms of this Agreement;
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Loan
The Lender agrees to lend to the Borrower, and the Borrower agrees to borrow, a sum of ₹{{loan_amount}} ({{loan_amount_words}}) (the "Loan"). The Loan is unsecured. The Borrower shall use the Loan for: {{loan_purpose}}.
2. Disbursement
The Loan has been / shall be disbursed by the Lender from the Lender's own bank account to the bank account of the Borrower as follows: {{disbursement_details}}. No part of the Loan shall be disbursed in cash. The Borrower acknowledges receipt of the amounts so transferred, and the bank record of the transfer shall be conclusive evidence of disbursement.
3. Interest
The Loan shall carry interest as follows: {{interest_rate}}. Where interest is payable, it shall be calculated on the principal outstanding from time to time, from the date of disbursement to the date of repayment. Where the Borrower is required by law to deduct tax at source from the interest — under Section 194A of the Income-tax Act, 1961 or Section 393(1) of the Income-tax Act, 2025, as applicable — the Borrower shall deduct it, pay the balance to the Lender, deposit the tax and furnish the certificate of deduction to the Lender within the time prescribed.
4. Repayment
The Borrower shall repay the Loan as follows: {{repayment_terms}}, and in any event in full, with all interest accrued, on or before {{repayment_date}}. The Borrower may repay the whole or any part of the Loan earlier, without premium, on ______ days' notice. Every repayment of principal and every payment of interest shall be made only by account-payee cheque, account-payee bank draft or electronic transfer to the Lender's bank account, and not in cash.
5. Default
If the Borrower fails to pay any sum on its due date, that sum shall carry interest at ______% per annum from the due date until payment. On the occurrence of any of the following, the Lender may, by notice in writing, declare the whole of the Loan and accrued interest immediately due: (a) default in payment continuing for ______ days after written demand; (b) the Borrower being adjudged insolvent or, being a company, becoming subject to insolvency resolution or winding-up proceedings; (c) any representation in Clause 6 being found untrue in a material respect; (d) use of the Loan for a purpose other than that stated in Clause 1.
6. Representations of the Borrower
The Borrower represents that it has full power to borrow the Loan and to perform this Agreement; that, where the Borrower is a company, the borrowing has been approved by a resolution of its Board of Directors passed at a meeting of the Board, a certified copy of which has been given to the Lender, and is within the limits applicable to the company under the Companies Act, 2013; and that no proceedings for insolvency are pending or threatened against it.
7. Lender's Declaration — Where the Borrower is a Company
Where the Lender is a director of the Borrower, or a relative of a director of the Borrower being a private company, the Lender declares that the Loan is not being given out of funds acquired by the Lender by borrowing or accepting loans or deposits from others, and has furnished to the Borrower, at the time of giving the money, a written declaration to that effect in the form annexed. The Borrower shall disclose the money so accepted in its Board's report and include it in its return of deposits and exempted transactions filed with the Registrar of Companies. [Delete this Clause and the Annexure where the Borrower is not a company.]
8. Lender's Source of Funds
The Lender confirms that the Loan is advanced out of the Lender's own disclosed funds, and shall on request furnish to the Borrower a confirmation of account with PAN, and such bank statement extracts as the Borrower may reasonably require to establish the identity and creditworthiness of the Lender and the genuineness of the transaction before the income-tax authorities.
9. Confirmation of Balance
The Borrower shall, as at 31st March each year and at any other time on request, sign and deliver to the Lender a written confirmation of the principal and interest outstanding. The parties intend each such confirmation to operate as an acknowledgement of the debt.
10. No Assignment by the Borrower
The Borrower shall not assign or transfer its obligations under this Agreement. The Lender may assign the Lender's rights with notice to the Borrower. This Agreement binds the heirs, legal representatives, successors and permitted assigns of the parties.
11. Notices
Notices under this Agreement shall be in writing and sent to the addresses stated above, or to the e-mail addresses ____________ (Lender) and ____________ (Borrower), or such other address as a party may notify.
12. Governing Law and Disputes
This Agreement is governed by the laws of India. Any dispute arising out of it shall be ____________ [choose one — "subject to the exclusive jurisdiction of the courts at {{execution_place}}" / "referred to arbitration by a sole arbitrator under the Arbitration and Conciliation Act, 1996, the seat being {{execution_place}}"].
13. Stamp Duty
This Agreement is executed on non-judicial stamp paper of the value required for a loan agreement under the Stamp Act applicable in the State of execution; the duty varies from State to State. Each party shall retain a signed copy.
IN WITNESS WHEREOF the parties have signed this Agreement on the day, month and year first above written.
_______________________________
{{lender_name}} (Lender)
_______________________________
{{borrower_name}} (Borrower) [for a company: by its authorised director, with name, DIN and the Board resolution date]
Witnesses
1. Signature: _______________________________
Name: _______________________________
Address: _______________________________
2. Signature: _______________________________
Name: _______________________________
Address: _______________________________
SCHEDULE — Repayment Schedule
| Instalment no. | Due date | Principal (₹) | Interest (₹) | Total (₹) |
|---|
| 1 | ____________ | ____________ | ____________ | ____________ |
| 2 | ____________ | ____________ | ____________ | ____________ |
| 3 | ____________ | ____________ | ____________ | ____________ |
| ____ | ____________ | ____________ | ____________ | ____________ |
ANNEXURE — Declaration by Director / Relative of Director
[Under Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014 — to be signed and handed to the company at the time the money is given]
To: The Board of Directors, {{borrower_name}} (CIN: )
I, {{lender_name}}, holding PAN {{lender_pan}}, being an individual not related to the Borrower, hereby declare that the sum of ₹{{loan_amount}} ({{loan_amount_words}}) given by me to the company as an unsecured loan on ____________ [date] is not being given out of funds acquired by me by borrowing or accepting loans or deposits from others.
Name of the director to whom I am related, and relationship (where the lender is a relative of a director): ____________
Date: ____________ Place: {{execution_place}}
_______________________________
{{lender_name}}
