Fast, secure, efficient: create loan agreements with templates

What is a loan agreement?

A loan agreement is a legal document that regulates the conditions for the transfer of money between a lender and a borrower. It clearly defines how much money is lent, the repayment terms and the rights and obligations of both parties. However, drawing up such an agreement requires a high degree of legal knowledge and precision. Sample loan agreements offer valuable support here by providing a structured basis for drawing up the contract. In this blog post, you will learn everything you need to know about loan agreement templates and how you can use and adapt them effectively.

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Core elements of a model loan agreement

Regardless of the type of loan, there are key elements that must be included in every template to ensure legal certainty and clarity for all contracting parties. These core elements ensure that the key points of a loan are regulated in a transparent and comprehensible manner.

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Preamble and contracting parties
The contract should begin with a clear preamble describing the purpose of the agreement. It is important to clearly define the contracting parties by listing the lender and the borrower with full names and addresses.

Example:

"This Loan Agreement is concluded between [first name surname/company name], hereinafter referred to as "Lender", having its registered office at [address], and [first name surname/company name], hereinafter referred to as "Borrower", having its registered office at [address]. The purpose of this agreement is to regulate the terms and conditions of the loan and to ensure a legally secure agreement between the parties."

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Loan amount and disbursement
A crucial element is the precise indication of the loan amount, both in figures and in words. There should be clear rules on the disbursement of the amount, including the conditions and timing of the disbursement.

Example:

§ 2 Loan amount and disbursement

1. The lender provides the borrower with an amount of EUR 10,000 (ten thousand euros).
2. The loan amount will be paid out in one lump sum to the following bank account of the borrower:
   Account holder: [First name Last name]
   IBAN: [DE00 0000 0000 0000 0000 00]
   BIC: [BANKCODE]
   Bank: [Name of bank].
3. Payment will be made within 5 working days after this contract has been signed by both parties and all necessary documents have been received.
   

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Term and repayment
The contract term must be clearly defined, as must a repayment plan. This plan should contain detailed information about the repayment modalities, including the frequency and amount of installment payments.

Example:

§ 3 Term and repayment

1. The term of this loan agreement is 24 months and begins on January 1, 2025. The agreement ends automatically on December 31, 2026, provided the loan amount has been repaid in full.
2. Repayment is made in monthly installments of EUR 500 (five hundred euros) on the first of each month, starting on February 1, 2025.
3. Payments are to be transferred to the following account of the lender:
   Account holder: [First name Last name]
   IBAN: [DE00 0000 0000 0000 0000 00]
   BIC: [BANKCODE]
   Bank: [Name of bank].
4. Early repayment of the balance is possible at any time, but requires written notification at least 30 days in advance.
5. Default interest of 5% p.a. above the prime rate shall be charged for late payments.

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Interest rate
The interest rate as well as the method for calculating interest and the payment intervals should be defined to ensure that both parties are fully aware of the interest costs incurred.

 Example:

§ 4 Interest

1. The loan amount bears interest at a rate of 3.5% p.a. (per annum).
2. Interest is calculated on the basis of a 360-day year and the actual number of days in the respective month.
3. Interest payments are made quarterly on March 30, June 30, September 30 and December 30, starting on March 30, 2025.
4. The interest is to be transferred together with the respective repayment installment to the account of the lender:
   Account holder: [First name Last name]
   IBAN: [DE00 0000 0000 0000 0000 00]
   BIC: [BANKCODE]
   Bank: [Name of bank].
5. In the event of late payment of interest, default interest of 5% p.a. above the agreed interest rate will be charged

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Collateral
Collateral is an essential component of loan agreements. A detailed description of the agreements, such as guarantees or mortgages, should be included in order to minimize the risk for the lender.

Example:

§ 5 Collateral

1. The borrower provides the following collateral to secure the loan:
   a) Guarantee: [name of guarantor], resident at [address], undertakes to guarantee repayment of the loan in the event of default. The declaration of surety is attached to this agreement as Annex 1.
   b) Mortgage lien: The borrower creates a mortgage lien on the property with the address [property address]. The Lender shall be entered as a creditor in the land register.
2. The borrower undertakes to maintain the collateral in full for the entire term of the loan.
3. The lender is entitled to realize the collateral in the event of default in order to cover the outstanding receivables.
4. Changes or additions to the securities require the prior written consent of both parties.

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Termination rights and deadlines
It is important to clearly define the regulations for ordinary and extraordinary termination of the contract by both parties. This also includes deadlines for termination and possible consequences in the event of a breach of contract.

Example:

§ Section 6 Termination rights and deadlines

1. Ordinary termination:
   a) The loan agreement can be terminated in writing by either party with a notice period of 3 months to the end of a calendar month.
   b) Ordinary termination is possible at the earliest at the end of the agreed contractual term.
   
2. Extraordinary termination:
   a) The lender is entitled to terminate the contract extraordinarily and without notice if:
   • The borrower defaults on two consecutive installments or an amount of more than 10% of the loan amount.
   • The borrower has breached material contractual conditions, such as the provision of the agreed collateral.
     b) The borrower may terminate the contract extraordinarily if the lender does not fulfill its contractual obligations, such as the timely payment of the loan amount.
3. Consequences of termination:
   a) In the event of termination, the outstanding loan amount, including all interest and costs incurred, must be repaid in full within 30 days.
   b) The contracting parties are obliged to inform each other of the termination in writing.
4. Form of termination:
   Notices of termination must be in writing and must be sent to the last known address of the other party.

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Severability clause
This clause ensures that the contract remains valid in its entirety, even if individual provisions are invalid. It provides additional protection for both parties and ensures that the contract remains valid.

Example:

§ 7 Severability clause

1. Should individual provisions of this contract be or become invalid or unenforceable in whole or in part, this shall not affect the validity of the remaining provisions.
2. In place of the invalid or unenforceable provision, a provision shall be deemed to have been agreed which comes as close as possible to the economic purpose of the invalid provision.
3. The same applies in the event that the contract proves to be incomplete.

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Sample loan agreement: the right template for every situation

Whether private, business or real estate-specific - every type of loan requires a suitable template that takes individual needs and legal requirements into account. This variety enables flexible structuring and clear legal protection. The most common templates include

• Personal loan templates are ideal for simple agreements between private individuals, such as interest-free loans between friends or within the family. They contain clear regulations on repayment modalities to avoid misunderstandings.
• Business loan templates are specially tailored to companies and contain detailed provisions on collateral and repayment modalities, such as guarantees or the pledging of company shares.
• Real estate loan templates take into account the special requirements of real estate financing. They contain specific clauses on the land charge, mortgage lending value calculation and specify the intended use of the loan. A common example is the annuity loan with constant installments and a clear interest rate structure. These models also offer flexibility through special agreements such as early repayments or interest rate adjustments.
• Consumer loan templates contain special protective clauses in accordance with the requirements of the Consumer Credit Directive. They protect the consumer from unfair contractual conditions and ensure that legal requirements are met.
• Bank loan templates offer standardized solutions for consumer and business loans, supplemented by comprehensive protection clauses that safeguard both the bank and the borrower. For larger loans in particular, they create a legal basis that guarantees transparency and security for both parties.
  
  

Legal particularities when using sample templates

The use of loan templates offers numerous advantages, but requires careful consideration of specific legal features. This is the only way to ensure that the contract is legally binding and creates clarity and comprehensibility for both parties.

1. Freedom of contract: In Germany, the contracting parties enjoy extensive freedom when drafting a loan agreement. Within the legal framework, they can determine the conditions of the loan themselves. However, it is important that these conditions do not violate applicable law or contain unfair clauses. A good template should offer this flexibility without exceeding the legal limits.
2. Legal requirements: Private loan agreements are subject to the provisions of the German Civil Code (BGB), in particular Sections 488 et seq. of the German Civil Code (BGB). These paragraphs regulate fundamental aspects such as repayment, interest and notice periods. It is therefore essential that the template takes these legal requirements into account. A breach of these provisions can lead to the invalidity of the contract.
3. Collateral and special agreements: For higher loan amounts, collateral should be specified in the template to minimize the risk for the lender. Special agreements such as early repayment options or arrangements for late payment should also be clearly documented in order to avoid conflicts at a later date.
4. Clauses on compliance with legal provisions: It is advisable to include clauses in the template to ensure that all relevant legal provisions are complied with. This includes provisions on contract amendments and breaches as well as information on the right of withdrawal, if applicable.
   
   

Digital tools for creating sample loan agreements

The use of loan agreement templates brings many advantages, but also entails risks if templates are not carefully adapted to the respective application. Frequent errors arise from uncritical reliance on standard templates in which individual agreements are missing or unimportant clauses are adopted. Equally problematic is the use of outdated templates that do not comply with current legal requirements and can therefore create unwanted gaps or conflicts. Incomplete adaptations, such as leaving placeholders or overlooking optional clauses, often lead to misunderstandings. Contradictory clauses created by combining different text modules also impair the quality and reliability of the contract.

This is where digital tools for contract management can help. Such software solutions support the creation and management of loan agreements by ensuring that they are legally up-to-date thanks to integrated legal databases. Intelligent functions such as error detection algorithms or AI-supported risk analyses detect inconsistencies and suggest alternative wording. In addition, these tools offer version control to clearly track changes and save considerable time through automated processes. These technologies can reduce errors and significantly improve the quality and legal certainty of loan agreements.

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Conclusion on the topic of sample loan agreements

Loan agreement templates are a helpful tool for drawing up legally compliant agreements. They provide a solid basis, but always require careful adaptation to the individual case. With the right understanding and the necessary care, you can use templates to efficiently create customized loan agreements that meet the interests of all parties involved and comply with legal requirements. By using modern tools and taking industry-specific features into account, you can take full advantage of contract templates. Keep up to date with legal developments and technological advances to continuously optimize your contract design. 

As a software solution for contract management, ContractHero offers numerous advantages in the creation and management of loan agreements. Our tool allows you to easily create loan agreements using dynamic text fields and modules. Alternatively, you can simply import existing contracts, access them at any time and adjust them automatically as required. Thanks to automated digitization and management, the entire process is significantly accelerated and simplified.