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Loan Agreement Templates and Resources in Australia

Whilst the old adage may implore you to “neither a lender or borrower be”, sometimes a loan is necessary to achieve a goal.

If you’re borrowing from a bank or other institution, the rules are usually quite clear and the relationship purely transactional free of emotional involvement. The bank provides an agreement which outlines the terms and conditions under which the borrower will repay the loan.

Matters become murkier if the loan is between family, friends or business associates because of our concern for the happiness of the other person.

People often conduct these types of loan arrangements on a handshake which leaves the terms undefined and open-ended. Without clear guidelines, the borrower won’t know when to repay the loan, and the lender cannot be sure when the loan amount will be returned. All of this uncertainty could leave the relationship at risk, particularly if the borrower fails to repay the loan amount.

Unpaid loans cause conflict

Often the fallout of an unpaid debt goes way beyond the money – it causes friction and conflict in relationships and kills the goodwill and altruism that sparked the loan in the first place

But it doesn’t have to be like this.

You can make a personal loan to someone and use a written agreement which will provide clarity, protects your money and demonstrates that you are serious about the return of your hard earned cash.

A written agreement reduces the risk

One of the ways that both a lender (and borrower) can protect themselves and lessen the risk of dispute or misunderstanding, is to clearly document the loan transaction in a written agreement which covers all of the agreed terms, such as:-

  • The loan amount;
  • the purpose of the loan;
  • The interest rate, if any;
  • How and when the Borrower will repay the loan;
  • The due date of whole amount;
  • The term of the loan;
  • Whether the Lender requires a guarantee;
  • Whether the Lender will take security over assets; and
  • Whether there will be any consequences in the event of default.

You can enter into a very simple loan agreement, or create a more complex agreement depending on the situation and your needs.

A written loan agreement gives you evidence of the loan, and if things go sour it will enable you to prove the nature of the transaction in court or tribunal proceedings should the need arise.

The existence of a loan can be difficult to prove if based on a verbal agreement. The borrower may dispute the loan amount, when it needed to be repaid or merely claim the amount was a gift. You can eliminate these potential issues and minimise the possibility of conflict by signing a written agreement.

Learn: What to include in a Loan Agreement?

Personal Loan Agreement templates

Secured Loan Agreement Template

Secured Loan Agreement Template CoverThis agreement is used when the borrower offers chattels or some asset of value other than real estate to secure the lender’s interest. The secured property may be, machinery, a motor vehicle, boat or any other item of value. The document contains all the provisions you will need to document a loan so the lender can register their interest on the Personal Property Security Register (PPSR).

Along with a detailed users guide, this secured loan agreement template will give the lender the confidence that their interests are protected and the leave no doubt in the borrower’s mind as to their responsibilities.

Loan secured by Mortgage

Unsecured Loan with MortgageThis document is similar to our secured loan agreement with one major difference, the security is held over real estate in the form of a mortgage. A Mortgage is a security interest in real property (land). It is the vehicle most people use when they are looking to raise money to buy a home; or they wish to borrow additional funds and use the equity they have in their existing property as security for the loan.

Unsecured Loan Agreement with Guarantee Template

Unsecured LoanThis agreement documents the terms of a personal loan and between the lender, the borrower, and a guarantor.  If the borrower defaults on their obligations, the guarantor/s step in and assume full responsibility for the repayment of the Loan on behalf of the borrower.

Arrangements like this are quite common when lending money to a company where directors guarantees are crucial to secure the lender’s interest.

Should the need arise you can rely upon this document in a court or tribunal to serve as evidence of the loan.

Unsecured Loan Agreement with Caveat Template

Unsecured LoanThis agreement is an unsecured loan agreement which means you don’t actually hold security over any goods or property (real estate). However the agreement gives the lender permission to lodge a caveat over the borrower’s real estate interest or interests.

Indemnity Agreement Template

Indemnity AgreementAn indemnity agreement is an undertaking from one person to another in which financial responsibility is decided.

Business Loan Agreement Templates

Division 7a Loan Agreement Template

Division 7a Loan TemplateThe aim of Division 7A of the Income Tax Assessment Act 1936 (the Act) is to prevent privately held companies from making tax-free distributions of profits to its directors and shareholders in the form of loans.

Division 7A sets out strict provisions that automatically treat payments, loans and debts forgiven by private companies to its shareholders or associates of shareholders as deemed dividends and therefore assessable income.

Learn: Div 7a loan agreements – the tax facts you need to know

Deed of Release for a Loan

Deed of Release Loan This document is used when a Lender releases a borrower from their obligations under a loan agreement.

Credit Application Template

Credit Application Template COverUse this credit application when a customer wishes to establish a Trading account with a supplier. Should the customer be a company,  the personal guarantees of the company directors are required. This agreement will provide strong legal recourse in the event of a misunderstanding or if the applicant fails to fulfil its obligations.

Associate Lease Agreement Template (Salary Sacrifice Arrangements)

Associate Lease Agreement Template An Associate Lease is a popular method for tax minimisation and may form part of a salary sacrifice package.

The Associate Lease arrangement includes three parties: an employee, an associate of the employee (often a family member, spouse or family company) and the employer.

In this arrangement, the associate owns a motor vehicle, which it leases to the employer. The employer then provides a fully maintained vehicle to the employee as part of the salary package.

Putting a compliant Associate Lease Agreement in place is recognised by the ATO as an employer-provided benefit in compliance with the Fringe Benefits and Income Tax Assessment Acts.

Loan Related Resources

What is a Guarantor?

What is a guarantorGuarantees are used in a variety of situations to secure a loan, lease or the performance of a contractual obligation. However, if you are considering becoming a guarantor, it is important you understand your responsibilities under the agreement, as there are certain risks involved.

How to reduce the risk of making a personal loan

personal Loan Lending money to friends or relatives can be a risky activity, especially when the terms are vague. Putting the arrangement in writing allows each party to know where they stand and stops potential problems.

What is Sexually Transmitted Debt?

Sexually Transmitted DebtThe term “Sexually Transmitted Debt” is used to describe debt incurred by one party in a relationship on account of the other.  Women are more likely than men to incur an STD.

How to avoid Sexually Transmitted Debt

Talking about financesIn Part 1 we explained what an STD is and how they can occur, Part 2 looks at practical tips for avoiding them. The key tip is learning to communicate with your partner about financial matters and building trust before commingling finances.

Show me the Money – A Quick Guide to Knowing when to engage a Debt Collection Agency

Cash flow is King in any business but what do you do when your customers aren’t paying on time? How do know when it’s time to stop chasing them yourself and call in a debt collector?

Pay your bills on time or risk black mark against your name – Credit report changes

credit report changesLearn about changes to the credit reporting system in Australia and how to check if your credit history has been affected.


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