Loan Agreement Letter

A loan agreement letter stipulates an agreement between a lender and a borrower. Typically, the letter is sent to the borrower, who is then expected to write back with his acceptance of the terms and conditions stated therein.

You might also want to write a loan agreement letter if you are lending money in a less formalized business environment, where a letter signed by the borrowing party would suffice your purposes.

Tips for Writing a Loan Agreement Letter

  • Must have formal language
  • Should be clear and precise regarding the terms of the agreement and the amount of loan
  • Should have all relevant details regarding the parties, including their identification
  • Make sure all conveyance in this regard is signed

Instructions

  • 1

    Sample of a Loan Agreement Letter #1


    To,
    Mr. Tomas Harding
    Community Health Foundation
    122 Veteran Ave.
    Los Angeles, CA 90034

    May 12, 2013

    Dear Mr. Harding,

    I hope you find this letter in the best of health and spirits. The following is an agreement between Mr. Tomas Harding, CEO of Community Health Foundation, 122 Veteran Ave, Los Angeles, CA 90034 and NatWest Bank, 29 Oxford Street, West London, E6 7gh, London.

    As discussed during the meeting, Mr. Harding requested a loan from NatWest Bank in West London on May 10, 2013 for his company’s financial aid and support in accordance with bank’s standard operating procedures. Community Health Foundation will be required to agree to the specific terms and conditions. The signed contract must be returned to us no later than May 15, 2013.

    After evaluating your requirements and circumstances, NatWest Bank has decided to offer you a loan based on several terms and conditions which are given below.

    The maximum term of the loan is ten years.

    Depending on the loan amount it will be accumulated starting from year one until the date of this contract.

    NatWest Bank will offer a loan of $50,000 to Community Health Foundation on the date mutually agreed by both parties.

    Please sign this letter and return it to us as soon as possible

    NatWest Bank
    Eric Baker
    Sales Manager

  • 2

    Loan Agreement Letter Sample #2


    To,
    Mr. Jason Bingham
    129 Statesman Ave.
    Los Angeles, CA 90034

    June 12, 2013

    Dear Mr. Jason,

    I am writing this letter in regards to our earlier discussion on the terms for your loan request. I hereby offer to lend you the requested amount of $10,000 for a period of 10 months, starting June 15, 2013.

    Moreover, I will be charging a total of 10% interest on the loan, which if returned on time, will amount to $1,000. However, if you are unable to return the borrowed amount, you will be liable to pay an additional 3% interest per month.

    Kindly sign this letter and send it back to me if you accept the terms. I will then be sending you back a copy of the same.

    If you have any questions, feel free to contact me.

    Regards,

    Henry Smith

  • 3

    Template of Loan Agreement Letter


    To,
    [Recipient's Name]
    [Recipient's Address]
    [Date]

    Dear [Recipient’s Name],

    I am sending this letter in regards to your loan request at (date of request). I/We have reviewed your request and agree to lend you ($ amount of money being lent) for a period of (loan term).

    The interest rate on the amount will be (interest rate), and if you are unable to discharge it within the stipulated time, you agree to pay an additional interest of ($ additional interest) per (month/week etc)

    Kindly send us a signed copy of this if you agree to the terms.

    If you have any questions or queries, please do not hesitate to contact me.

    Regards,

    [Sender’s Name]
    [Sender’s title]

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