A personal loan agreement is just an IOU with a bit more structure. Use it when there’s a repayment schedule, a larger amount, or anything you want to be unmistakably clear.
What it should include
- Parties and amount — who’s lending, who’s borrowing, and how much.
- Repayment schedule — lump sum on a date, or instalments with amounts and dates.
- Interest — state the rate, or say "no interest" explicitly.
- Late or missed payments — a grace period or what you’ll do if plans change.
Write it in plain English so you both genuinely read and understand it before signing. A term nobody understood isn’t much protection.
Then make it real
Both of you review the draft, adjust anything that’s off, and e-sign. You each keep a signed copy — so the agreement, not anyone’s memory, is the record.