A friendly, interest-free loan agreement you can customize and download in minutes

A friendly loan and security agreement is the contract two people - or a person and a business - where one lends money to the other as a favour rather than as a commercial lender. This template is based on a Kenyan format and keeps the arrangement friendly: the loan is interest-free, repaid in fixed monthly installments, and backed by security (an item the borrower owns) that the lender can call on only if a default is not put right in time.

Just answer a few simple questions - the borrower's and lender's details, the loan amount and disbursement account, the installment amount and start date, and the security offered - and your personalized agreement is generated instantly, ready to download as PDF or Word.

What this loan agreement includes

- Clear identification of the Borrower and the Lender, and a plain recital of why the loan is being made

- The loan amount and the account the funds are sent to on execution

- An interest-free clause, with default interest that applies only for a month in which an installment is missed

- A repayment clause - a set number of equal monthly installments, a start date, and a fixed monthly due day

- A security clause creating a valid security interest in item(s) the borrower owns, activated only if a default is not rectified within the cure period

- A prepayment clause allowing early repayment with no penalty

- A dispute-resolution clause - mutual consultation first, then mediation, while preserving the right to go to court for urgent relief

- Severability, a confidentiality clause tied to local data-protection law, and an applicable-law clause

- An execution and signature block for both the Lender and the Borrower

How to create your loan agreement

1. Open the template and click Generate.

2. Answer the guided questions: the parties, the loan amount and account, the installments and start date, and the security.

3. Generate the document: your details are merged into the agreement automatically.

4. Review and download as PDF or Word, then sign, keep a copy, and record the repayment schedule.

Who is this loan agreement for?

People in Kenya lending to friends, family or colleagues who want the goodwill of a friendly, interest-free loan but still want it in writing and backed by security. It suits small personal loans repaid over a few months, and because the country and key figures are fields you fill in, the same format can be adapted where the arrangement and law are similar.

Disclaimer: This template is provided for convenience and general information only and is not legal advice. Lending, security-registration, data-protection and consumer-credit rules vary by country and by the type and amount of the loan. For larger loans, loans secured against valuable property, or anything you are unsure about, have the final agreement 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

- Interest-free friendly-loan structure with security and default terms

- Instant download after generation

#interest free loan agreement templates

Friendly Loan Agreement Example (Kenya)