Loan Agreement Format (Unsecured)
Record the terms of an unsecured loan between individuals, firms or companies and download it as a Word file.
What it is
A loan agreement records the amount lent, the interest rate, how and when the loan will be repaid, and the consequences of default. A written agreement helps both parties explain the transaction to banks and tax authorities and avoids disputes later.
When it is used
- Lending money to a friend, relative or business associate.
- A director or shareholder lending money to their company.
- Inter-corporate loans within a group.
What the template covers
- Principal amount, date and mode of disbursement
- Interest rate and default interest
- Tenure and repayment type (lump sum or instalments)
- Purpose of the loan and representations
- Events of default and prepayment
- Jurisdiction
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Agreement Details
Agreement Date; Place; Stamp Paper Value (₹)
Lender
Lender Name; Lender Type; Lender Address; Lender PAN
Borrower
Borrower Name; Borrower Type; Borrower Address; Borrower PAN
Loan Terms
Principal Loan Amount (₹); Date of Disbursement; Mode of Disbursement; Interest Rate (% p.a.); Loan Tenure (months); Repayment Type; Purpose of Loan
Default
Default Interest Rate (% p.a. additional); Jurisdiction
Stamp duty, registration and filing
A loan agreement is stamped under the Stamp Act of the State where it is executed, and the duty often depends on the loan amount. Income-tax law restricts accepting or repaying loans of ₹20,000 or more otherwise than by account payee cheque, bank draft or electronic bank transfer. For companies, money borrowed from persons other than directors (and certain other exempt sources) can fall under the deposit rules of the Companies Act, 2013, so check the lender's status first.
Generate the Loan Agreement
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
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Frequently asked questions
Is interest mandatory on a loan between relatives?
No. Parties can agree an interest-free loan. If interest is charged, the lender reports it as income and the borrower may need to deduct TDS in some cases.
Can a director lend money to their own private company?
Yes. A loan from a director is exempt from the deposit rules if the director gives a written declaration that the amount is not given out of funds borrowed from others. The company's board should approve the borrowing.
Should the loan be paid in cash?
No. Income-tax law restricts loans and repayments of ₹20,000 or more in cash. Use a bank transfer or account payee cheque so the transaction is traceable.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.