India - Business
Loan Agreement
Legal agreement between a lender and borrower defining terms of a personal or business loan in India.
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Instructions
How to create a Loan Agreement:
1. Enter complete details of lender and borrower with identification numbers.
2. Specify the exact loan amount, interest rate, repayment period, and monthly EMI.
3. Clearly state the purpose of the loan. If secured, describe the security/collateral.
4. Both parties should sign. Consider notarization for larger amounts. The agreement should be on stamp paper of appropriate value.
1. Enter complete details of lender and borrower with identification numbers.
2. Specify the exact loan amount, interest rate, repayment period, and monthly EMI.
3. Clearly state the purpose of the loan. If secured, describe the security/collateral.
4. Both parties should sign. Consider notarization for larger amounts. The agreement should be on stamp paper of appropriate value.
Frequently Asked Questions
Is stamp duty required on loan agreements?
Yes, loan agreements must be executed on stamp paper. The stamp duty varies by state and loan amount.
What is the maximum interest rate allowed?
There is no specific cap on interest rates for private loans, but usurious rates can be challenged under the Usurious Loans Act. Rates should be reasonable.
Is TDS applicable on interest payments?
TDS under Section 194A is applicable if the interest exceeds Rs. 5,000 in a financial year for non-banking lenders.
Can the loan be prepaid without penalty?
As per this agreement, yes. Prepayment terms can be customized as mutually agreed.
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