Loan Contract Template
Loan Contract Template for a short, fixed term loan; written in simple, plain-English; covers the amount, interest and repayment schedule etc.
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A short-term loan contract you can customize and download in minutes
A loan contract is the agreement a lender and a borrower sign to put a loan of money in writing. This template is a standard, plain-English format built for short-term lending — loans meant to be repaid over 3 to 6 months — whether between individuals, between a business and an individual, or between two companies. It sets out how much is lent, the interest rate, a repayment schedule that fits a short term, the fixed maturity date by which everything must be repaid, and what happens if a payment is missed.
Just answer a few simple questions - the lender's and borrower's details, the loan amount, the interest rate, the loan term and repayment schedule, and any security - and your personalized loan contract is generated instantly, ready to download as PDF or Word.
What this loan contract includes
- Clear identification of the Lender and Borrower
- The loan amount (principal), when it is paid out (the Disbursement Date), and the purpose of the loan
- A dedicated short-term clause: the loan term in months and a fixed Maturity Date by which the loan must be fully repaid
- The interest rate and how interest is calculated (including an interest-free option)
- A flexible repayment schedule that fits a short term — a single lump-sum repayment at maturity or a small number of instalments — with a clear no-automatic-rollover rule
- A prepayment clause allowing early repayment without penalty
- A late-payment clause with default interest, a grace period, and a "time is of the essence" note suited to short-term loans
- A security / guarantee clause (or a clear statement that the loan is unsecured)
- The borrower's representations, a list of events of default, and the lender's right to accelerate and enforce
- A costs clause, a notices clause, a governing-law clause you choose, and standard general terms
- A clean signature block for both parties
How to create your loan contract
1. Open the template and click Generate.
2. Answer the guided questions: the parties, the loan amount, the interest rate, the term and repayment schedule, and any security.
3. Generate the document: your details are merged into the contract automatically.
4. Review and download as PDF or Word, then sign and keep a copy of the repayment schedule.
Who is this loan contract for?
Individuals lending to family, friends or business partners for a few months, small businesses giving or taking a short-term or bridge loan, and anyone who wants a clear written record of a short loan instead of an informal promise. Because it is jurisdiction-neutral, you choose the governing law, so the same format adapts to your country or state.
Disclaimer: This template is provided for convenience and general information only and is not legal advice. Interest-rate caps, consumer-credit licensing, usury and lending rules vary widely by country, state and loan type, and some short-term loans are specifically regulated. For regulated lending, high-value loans, or loans to consumers, have the final contract reviewed by a qualified lawyer before signing.
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What's included
- Professional formatting and layout
- Easy customization with guided questions
- Multiple export formats: pdf, docx
- Standard, plain-English clauses built for short-term loans
- Instant download after generation
- Professional formatting and layout
- Easy customization with guided questions
- Multiple export formats: pdf, docx
- Legally reviewed and compliant
- Instant download after generation
What is a loan contract and when should I use this short-term version?
A loan contract is a legally binding agreement that records the terms of a loan of money — how much is lent, the interest, how and when it is repaid, and what happens if a payment is missed. Use this short-term version when the loan is meant to be repaid quickly, typically over 3 to 6 months — for example a bridge loan, short working-capital advance, or a quick loan between friends, family or business partners. Putting it in writing turns an informal promise into an enforceable record and makes the maturity date and repayment schedule clear to both sides.
How does the short-term repayment schedule work?
You choose how the loan is paid back within its short term. It can be a single lump sum — principal plus all accrued interest paid on the maturity date — or a small number of instalments (for example three to six monthly payments). Either way, the whole outstanding balance must be cleared on or before the maturity date. The contract also makes clear that it does not renew or roll over automatically; any extension has to be agreed in writing and signed by both parties.
How is the interest calculated, and can the loan be interest-free?
Interest is charged on the outstanding balance at the annual rate you set, on a simple-interest basis, from the day the loan is paid out until it is repaid in full. Because the term is short, the total interest stays modest, and if the borrower repays early the interest is recalculated on the reduced balance. If you prefer a no-interest loan, set the rate to 0% — the template records it as interest-free and no interest accrues.
Can the borrower repay early, and what happens if a payment is late?
Yes — the borrower may repay all or part of the loan early at any time without penalty, and interest is recalculated on the reduced balance. If a payment is late, the template charges default interest on the overdue amount and gives a short grace period before the miss becomes an event of default. Because these are short-term loans, the contract states that time is of the essence for payment; after the grace period the lender can declare the whole loan immediately due and take steps to recover it.
Does the loan need security or a guarantor?
Not necessarily. The template works for both secured and unsecured short-term loans. If the borrower offers collateral (such as property or a vehicle) or a guarantor, you describe it in the security clause; if not, the clause simply records that the loan is unsecured and the lender relies on the borrower's promise to repay. Security gives the lender something to enforce against if the borrower defaults.
Is this loan contract valid in any country?
It is written in plain, common-law style and is not tied to one country, so you choose the governing law and courts. Be aware that short-term and consumer lending is heavily regulated in many places: there may be interest-rate caps, consumer-credit licensing rules, or usury laws that override what the parties agree. For regulated or consumer lending, or high-value loans, check your local rules — or ask a local lawyer — before relying on it.
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