Sample Loan Agreement Letter PDF Word File


If you are looking for a sample loan agreement letter that you can download in Word or PDF format, you have come to the right place.

In the financial world, lending money is a serious matter, and there are times when we need to have clear records to protect both parties.

The agreement letter we provide is suitable for many types of loans, whether it is a loan between friends, family, or a more formal personal loan.

This document is very useful to explain the terms of the loan such as the amount borrowed, repayment period, and other related matters.

You can easily download this agreement letter in Word or PDF format, and then you can customize it according to your needs.

Money Loan Agreement Letter
Money Loan Agreement Letter

What is a Money Loan Agreement?

A loan agreement letter is a written document that records the agreement between the lender and the borrower regarding the amount of money borrowed, the repayment date, the interest rate (if any), as well as other conditions related to the loan.

This letter of agreement is a legal proof that protects both parties from any misunderstandings or disputes in the future.

Why is the Loan Agreement Letter Important?

  • A loan agreement letter helps ensure that all parties clearly understand the terms of the loan. This avoids any misunderstandings that could cause problems later on.
  • This document acts as legal evidence if there is a dispute in the future. It helps avoid conflicts and allows the parties to refer back to the original agreement.
  • This letter of agreement protects the rights of the parties involved in the money loan transaction. If there is a failure to pay, it provides a legal basis for legal action.

Contents of the Money Loan Agreement Letter

Here are the elements that need to be included in the loan agreement letter:

  • Name and address of lender (first party).
  • Name and address of the borrower (second party).
  • Amount of money lent in numbers and words.
  • The date on which the loan is granted.
  • If there is an interest rate, it needs to be stated in percentage and the amount of money charged interest.
  • The deadline by which the borrower must repay the loan.
  • The agreed payment method, either through monthly installments or a lump sum payment.
  • Any penalty or fine that will be imposed if the borrower fails to repay within the specified period.
  • If the second party provides a guarantee, the details of the guarantee must be included.
  • Signature of both parties along with witnesses if necessary.

Procedure for Making a Letter of Loan Agreement

The procedure for creating a Money Loan Agreement Letter is the steps that need to be taken to create an official document that records the terms of the money loan between the lender and the borrower.

  • The lender and the borrower need to discuss and agree on the terms of the loan. This includes the loan amount, repayment period, and interest rate (if any).
  • Agreement documents must be prepared. You can do it yourself or get the services of a lawyer.
  • All parties involved need to check the document carefully to ensure that the details stated are accurate.
  • Once all the details are agreed, the document needs to be signed by both parties together with witnesses (if necessary).
  • All parties should keep a copy of the agreement document for future reference.

Sample Loan Agreement Letter

Here is an example of a loan agreement letter:

Money Loan Agreement Letter – Friend’s Loan

DATE OF LETTER: (Insert Date)



  • Full name: (Name of Lender)
  • Identification card number: (Lender’s Identification Card Number)
  • Latest Address: (Lender’s Latest Address)


  • Full name: (Borrower’s name)
  • Identification card number: (Borrower’s Identification Card Number)
  • Latest Address: (Borrower’s Latest Address)

On this date, the above-mentioned Lender voluntarily and without any coercion agrees to provide a loan to the Borrower with the following details:

  1. With this I, (Name of Lender)Sudin has given a loan of RM**** to Ajis, (Borrower’s name).
  2. The borrower agrees to pay the loan amount as stated above within the period (Specify Duration) month/year, with a monthly payment of RM**** every month.
  3. If the Borrower fails to make monthly payments within the stipulated period, the case will be referred to the Court (Specify the Court) at (Specify Court Location). The borrower will be responsible for all costs involved in this claim.
  4. The Borrower agrees that all correspondence related to debt claims, including letters from lawyers and court documents, will be sent to the Borrower’s current address as stated in this agreement. This will be considered a perfect submission, and the Borrower will not have to pay newspaper advertisement costs or special submission costs.
  5. The Borrower agrees that the terms of this agreement bind his heirs in the event of the Borrower’s death. In that case, the amount of the unpaid debt can be claimed from the Borrower’s estate.

I, (Name of Lender), hereby certify that I have read, understand, and agree to all the details in this Letter of Agreement. I also willingly give interest-free money loans to (Borrower’s name).

Lender: (Lender’s Signature)


Borrower: (Borrower’s signature)



(Name of Witness)

(Witness signature)

Sample Loan Agreement Letter

Please download an example of a money loan agreement surah:

Debt Claims

To make a debt claim, you need to know the amount of debt you want to claim.

So, below is a guide in casual language to the jurisdiction of the court according to the amount of debt:

  • If your total debt is less than RM100,000, you can make a claim in the Magistrate’s Court.
  • If your total debt is more than RM100,000 but less than RM1,000,000, you need to go to the Sessions Court.
  • But if your total debt is more than RM1,000,000, you need to make a claim in the High Court.

So, remember to assess the amount of your debt before making a claim and make sure you choose the right court according to the jurisdiction.

The court will help you resolve debt disputes fairly and in accordance with the law.

If you don’t pay the loan

If the borrower still does not pay the licensed money loan or debt, you can follow the following steps to solve this problem:

  1. First, try to contact the borrower properly. Discuss the problem and find out why he still wants to pay. Sometimes, there are financial problems or other reasons that make it difficult for borrowers to pay. Listen to what he has to say and try to find a solution that is acceptable to both parties.
  2. If the discussion does not go smoothly and the borrower still does not want to pay, send an official notice to the borrower. This notice should state the amount owed, the payment period, and a warning of legal action if payment is not made. Remember, this notice needs to be formatted correctly and in accordance with the law.
  3. If this debt is a financial loan such as a personal loan or credit card, inform the relevant financial institution. They can help in solving these debt issues.
  4. If the borrower still refuses to pay and the problem becomes complicated, consult a lawyer. A lawyer can provide legal advice and help you claim debt through the legal process.
  5. Remember that there is a time limit for claiming a debt. If you are thinking of taking legal action, make sure you do it within the period set by law, especially if the amount owed is large.
  6. Although the debt may upset you, avoid taking physical action or threatening the borrower. This can lead to more serious legal problems.

Always remember that solving debt problems requires patience and wisdom.

Try communication first before taking legal action, and make sure you know your rights and responsibilities in this situation.

Final Word

Hopefully you are satisfied with the sample loan agreement letter that you downloaded earlier.

We provide this to facilitate your business and ensure that all your money loan agreements are valid and well structured.

Remember, even if it is a friendship loan agreement letter, it still needs to be taken seriously.

Make sure that this document is complete with important details such as loan amount, payment period, and default terms.

If there is anything you are unsure of or need legal advice, always consult a lawyer or financial expert.

They can help you understand your rights and responsibilities in this agreement.


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