Whenever you lend money, you should put a loan agreement in black & white and ask the borrower to sign it. It will help you get repaid.
A loan agreement can be used where you promise to lend someone (the borrower) money in the future or to acknowledge a loan you've already made.
Likewise, if you’re asking for a loan, you can offer to sign a Loan Agreement to help the lender feel secure about advancing you money.
If money is advanced without a loan agreement you could easily find yourself in a dispute about:
- whether the money was intended as a gift
- if and when it needs to be repaid or
- if and when interest is payable.
