Key Takeaways
- •The contract rate is not a verified APR.
- •Specify actual payment dates, amounts and final maturity.
- •Collateral and guarantees need their own precise scope.
- •Consumer and military protections can limit enforcement terms.
- •A form does not establish lending compliance or program approval.
The legal sources for these instructions are linked below.
What Is Loan Agreement?
A loan agreement records the parties’ actual funding and repayment obligations. The selected interest, fees, security and enforcement provisions should match the transaction and its required disclosures.
This builder covers nine arrangements: personal, unsecured business, real-property security, equipment security, SBA-related financing, bridge financing, construction, an existing-debt payment plan and release of a personal guarantee.
Make the agreement match the money flow
Identify funds actually advanced, net proceeds and any withheld charges. Do not acknowledge receipt merely because the parties have signed.
Provide a complete schedule, including any variable-rate formula or final balloon. Selecting an amortizing label does not calculate the payment.
Specify optional charges and conditions deliberately. The form does not insert a default extension fee, automatic discount, confession of judgment or unlimited guarantee.
Credit, disclosure and security requirements
Texas private loan interest and the written agreement date
For an ordinary private loan, Texas Finance Code §302.001 sets a 10% annual ceiling unless another law permits more. Fixed-rate parties can agree in writing to the applicable weekly ceiling. Look up the Texas Credit Letter for the date of the actual contract, renewal or extension. On May 15, 2026 the published ceiling was 18%. Do not apply that figure to a different period. Include interest-like fees, discounts and any default rate in the review. Check the separate delinquency-charge limit and ten-day waiting period. Silence on interest and an express zero-interest agreement have different consequences. Review licensing if the lender is regularly making household loans. A homestead prepayment charge above 12% requires separate review of the federal-agency exception. Texas original purchase money must be traced to the property closing. An advance against a home already owned is a different lien category, with lender, consent and enforcement requirements under Article XVI, Section 50 of the Texas Constitution.
California unsecured loans and the use of proceeds
For an ordinary written private loan used primarily for household expenses, California’s annual ceiling is generally 10%. Fees, commissions and withheld amounts can increase the interest charged. Money primarily used to buy, build or improve real property falls under a different rule even if the loan is unsecured. For that use and for ordinary business borrowing, compare 10% with five percentage points plus the applicable San Francisco Federal Reserve rate on the 25th of the month before the earlier of contracting to lend and making the loan. A licensing exclusion for an isolated commercial loan does not by itself increase the constitutional ceiling. Review lender-specific rules and mixed-state contacts separately.
New York private unsecured loans
For an ordinary private unsecured loan to an individual or sole proprietor, an amount below $250,000 generally carries a 16% annual civil limit. Include interest taken indirectly, such as retained charges or a valuable conversion right. A binding written installment commitment can change which principal amount counts. New York’s criminal provision addresses knowingly charging more than 25% without legal authority. A different test applies at $2.5 million and above. A corporation’s ability to raise a civil defense, a regulated lender’s authority and mixed-state contacts require separate analysis. The builder keeps unresolved terms in an unsigned draft.
APR and interest
Regulation Z calculates APR using the timing and amounts of advances and payments. Fees and withheld charges can change APR. Use verified actual disclosures; do not copy the nominal rate into an APR box.
Consumer-credit coverage
Regulation Z’s regular-creditor rules distinguish general consumer credit from dwelling-secured transactions and have additional high-cost provisions. A blanket five-loan test or private-lender label does not establish noncoverage.
Rates and licensing
Applicable ceilings and licensing rules depend on lender, loan purpose, amount, collateral and jurisdiction. A savings clause cannot establish legality. Check the actual controlling rule instead of relying on a single state-rate table.
Military protections
SCRA rules address qualifying pre-service obligations, including forgiveness of excess interest and applicable post-service mortgage protection. MLA coverage is a different determination with its own MAPR, disclosure and contract restrictions.
Dispute terms
Federal rules restrict mandatory arbitration for covered dwelling-secured consumer credit and MLA-covered credit. Preserve statutory recourse and do not assume an arbitration selection supplies all required terms.
Collateral
A mortgage or deed of trust needs its actual property-state instrument. Personal-property perfection may require filing, title notation, control or possession. No generic deadline or first-priority status is presumed.
SBA financing
The selected program’s lender and current instruments control. This builder is not an SBA authorization or eligibility decision. Reconcile actual program fees and repayment requirements before signing.
Tax treatment
Applicable federal rates change by month and term. Below-market loans have transaction-specific tax rules and qualified exceptions; 4% and $10,000 are not universal safe harbors.
What the agreement records
Parties, authority, locations, purpose and consideration.
Funding, net proceeds, rate mechanics and selected charges.
Actual payment schedule, maturity and prepayment terms.
Credit-law coverage and required disclosures.
Defined collateral, guarantees, covenants and special terms.
Default procedure, notice, final review and execution.
Choose the correct arrangement
Personal loan (friends, family, private individual)
Business loan — unsecured
Secured loan — real property (deed of trust / mortgage)
Secured loan — equipment or personal property (UCC-1)
SBA-related financing — lender documents required
Bridge loan (short-term, balloon)
Construction loan (draw schedule)
Payment plan (installment settlement of existing debt)
Release of personal guarantee (existing loan)
How to Fill Out Loan Agreement
1. Identify the transaction
Choose the arrangement and confirm the actual parties, purpose, locations and lender status.
2. Reconcile the economics
Record funding, rate calculation, charges and a complete payment schedule. Independently verify required disclosure calculations.
3. Complete supporting instruments
Prepare actual security documents, guarantees, approvals and required disclosures for the transaction.
4. Review and execute
Check mandatory rules, reconcile attachments, obtain signatures and complete delivery and any recording.
Key Terms Defined
- APR
- An annualized measure of credit cost based on the relevant charges, value received and payment timing.
- Maturity
- The actual date the final contractual balance is due, subject to the agreement and mandatory protections.
- Perfection
- Steps under the applicable law that affect a security interest’s protection against third parties.
- Guarantee
- A separate person’s expressly defined undertaking concerning the borrower’s obligations.
Related Documents
New loan
Documents advances and the actual repayment undertaking.
Payment plan
Restructures a specified existing obligation and records credits, discounts and payment terms.
Guarantee release
Discharges only the identified guarantor obligations under the stated scope and conditions.
Legal Authorities & Sources
This page is grounded in primary law. The statutes and official resources below are the authorities behind the guidance above. Verify the current text of any statute before relying on it.
Frequently Asked Questions
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Record the parties, the agreed terms and any questions that need to be resolved before signing.