Draft Format of Loan Agreement

A loan agreement is a legally binding contract between a lender and a borrower that outlines the terms and conditions under which the loan is provided and repaid. It typically specifies the loan amount, interest rate, repayment schedule, collateral (if any), and the rights and obligations of both parties. The agreement also includes provisions for default, penalties, dispute resolution, and termination to ensure clarity and protect the interests of both the lender and borrower. Loan agreements are commonly used for personal loans, business financing, or any arrangement where money is borrowed and repaid over time.

LOAN AGREEMENT

This Loan Agreement (“Agreement”) is made and entered into on this ………………. day of July, 2025, by and between:

LENDER

…………………… (PAN No. …………………..), residing at ………………….. hereinafter referred to as the “Lender”, which expression shall, unless repugnant to the context or meaning thereof, include his/her heirs, executors, administrators, legal representatives and assigns;

AND

BORROWER

………………. (PAN No. ……………………), residing at ………………, and her spouse …………… (PAN No. ………………..), holder of Bank Account No. ……………, jointly referred to hereinafter as the “Borrowers”, which expression shall, unless repugnant to the context or meaning thereof, include their heirs, executors, administrators, legal representatives and assigns.

WHEREAS:

1.The Borrowers have approached the Lender for financial assistance, and the Lender has agreed to lend a total sum of INR ……………../- (in words), the disbursal details of which are provided in Annexure A to this agreement;

2. The Borrower have accepted the said loan and undertake to repay the same in accordance with the terms and conditions set forth herein;

NOW, THEREFORE, THIS AGREEMENT WITNESSTH AS UNDER:

1. LOAN DISBURSEMENT

The lender has disbursed a total amount of INR ………/- (in words) to the Borrowers through multiple bank transfer made to Account No. ……………, held in the name of ……………….

The disbursals were executed from various personal bank accounts owned by the Lender. The date wise breakdown of the amount disbursed is provided in Annexure A, and the corresponding bank account numbers used for each disbursal are detailed in the Disbursement Bank Account Details section, which shall form an integral part of this Agreement.

2. PURPOSE

The loan has been extended for personal use by the Borrowers, and the Borrowers agree to utilize the funds responsibly and exclusively for the stated purpose.

3. REPAYMENT TERMS

• The Borrowers jointly undertake to repay the total loan amount of INR ………../- within a maximum period of three (3) to four (4) years from the date of execution of this Agreement.
• Vijay Devi agrees to remit a minimum of INR ………../- per month to the Lender from her salary/income, post joining her new employment.
• Additionally, repayment may also be made from agricultural produce or other sources of future earnings.
• Prepayment of loan is allowed without any penalty or additional charge.

4. JOINT AND SEVERAL LIABILITY

Both the Borrower and Co-Borrower (husband) accept jointly liable for the repayment of the loan. In case of default by either party, the other shall remain equally liable for the entire outstanding dues.

5. UNDERTAKING TO INFORM EMPLOYMENT STATUS

The Borrower agrees to notify the Lender in writing about her employment status after resigning from her current job and joining a new organization. She further undertakes to share her salary account details and proof of income from time to time.

6. DEFAULT & LEGAL CONSEQUENCES

In case of non-payment or default of any installment:

• The Lender shall have the right to recover the outstanding amount through appropriate legal channels including civil proceedings.
• Any cost, legal fee, or expense incurred in the recovery process shall be borne by the Borrowers.

7. IDENTIFICATION DETAILS

The identity of the Borrower is confirmed as under:

(Note: Self-attested copies of Aadhaar and PAN cards of both the Borrowers are annexed to this Agreement for identification and verification purposes.)

8. CONFIDENTIALITY

The Parties agree that the terms of this Agreement shall remain confidential and shall not be disclosed to any third party without prior written consent, except as required by law.

9.  JURISDICTION

This Agreement shall be governed by and construed in accordance with the laws of India, and the Courts of competent jurisdiction at ……………… shall have exclusive jurisdiction in case of any dispute.

10. DECLARATION

The Borrowers declare that they have voluntarily and willingly entered into this Agreement after fully understanding the contents and implications thereof. No coercion, force, or undue influence has been used by the Lender.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the

……………………………

Lender 

…………………………………………….
Name:
Date:

Borrowers

1. …………………………………………..

(Signature)
Name:
Date:

2. …………………………………………..

(Signature)
Name:
Date:

Witnesses

1. …………………………………………..

Name:
Address:
Date:

2. …………………………………………..

Name:
Address:
Date:

“ANNEXURE A”