Loan Agreement Template

Choose Commercial or Private Loan Terms

This loan agreement template puts the parties, use of funds and agreed payments into one document. Choose Commercial to record a business purpose, such as a company lending to another company to buy equipment. Choose Private for an arrangement such as one individual lending to another for a household expense. Give each party’s legal name and identify any company or other entity separately from the person who signs for it.

Section 5 of the National Credit Code looks at the actual borrower, predominant use of the credit, any charge for providing it and the connection with the lender’s business. The purposes it covers include personal, domestic or household use and specified residential property investment or refinancing. A label in this form settles none of those questions.

For a loan that falls under the Code, use the lender’s required contract and disclosure documents. Check the Australian Securities and Investments Commission’s credit licensing guidance before acting on a loan that could involve regulated credit activities.

Record Advances, Interest and Repayments

Enter the amount the lender will advance and what must happen before the money is paid. Count the final payment in the number of payments. Enter the principal portion of each regular instalment separately from the final principal payment. Choose fixed payment dates or count from an agreed event, such as the loan advance. For instalments, enter the first and final dates or offsets. The template uses the selected frequency to place intervening instalments and checks that the final payment falls after them.

Choose Interest-free for zero interest. If you choose Simple interest, enter the agreed annual rate. The draft applies it to the outstanding principal daily on a 365-day basis and makes accrued interest payable separately from each principal amount. For early repayment, specify whether it can happen at any time without a fee or record the agreed terms.

In the fictional commercial loan, Paperbark Finance Pty Ltd advances $48,000 to Saltbush Workshop Pty Ltd after both companies sign and the borrower supplies the equipment invoice. The parties choose Interest-free. Eleven monthly principal payments of $4,000.00 and a final $4,000.00 payment repay the amount advanced.

Describe Security and Missed Payments

If the parties agree on security, identify the asset and who gives the security. If they agree on a guarantee, name the guarantor and record its scope and cap. Have a lawyer prepare the separate documents needed to create the security or guarantee.

The Australian Financial Security Authority explains registration of personal property security. For land, use the relevant land registry process. In New South Wales, for example, the Registrar General’s schedule lists the National Mortgage Form for registering a mortgage over Torrens Title land. Drafting the loan agreement does not register or perfect a security interest.

Specify what counts as a default, how the lender gives notice and how long the borrower has to fix the breach. Use any applicable statutory notice requirements before enforcement. The builder lists unanswered fields and flags principal payments that fail to add up to the loan amount. Resolve the flagged terms before exporting.

Export and Complete the Agreement

Edit the draft, then copy or download the text to continue in a document editor. Print or save PDF opens the browser’s print dialog for the same text, with signing fields for the lender and borrower. If you change the form after editing the draft, use Discard edits and rebuild to apply the new terms before exporting.

Confirm each party’s signing authority and any witnessing requirements with your lawyer. Check that the agreed purpose still matches the final document. Give each party a signed copy. Record later variations in writing with the changed clause, effective date and required signatures, then file each variation with the signed agreement.