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You can write up a personal loan agreement by hand, with pen and paper, or draft it on your computer. Once the document looks good, it can be printed out and signed by both parties.

Follow the proper format when writing your letter, including a header and greeting, a summary of your request, basic information about your business, an explanation of the purpose of your loan, a summary of your ability to repay your loan and, finally, appropriate concluding elements.

To ensure that a loan proposal is written the right way, here are the four things you need to address clearly: How much money do you need. How you will use the money. How you will repay the loan. What you will do if you're unable to repay the loan.

Consider including: Names and addresses of the parties to the agreement. Loan amount (principal). Interest rate. Repayment terms, including dates, and any late fees or penalties. Signature lines.

How to Draft a Loan Agreement The addresses and contact information of all parties involved. The conditions of use of the loan (what the money can be used for) Any repayment options. The payment schedule. The interest rates. The length of the term. Any collateral. The cancellation policy.

Get It in Writing Your name and the borrower's name. The date the loan was granted. The amount of money being lent. Minimum monthly payment. Payment due date. Interest rate, if you're charging interest. Consequences for defaulting on the loan.