Sample Letter of Agreement for Lending Money

A sample letter of agreement for lending money can be helpful when you need to borrow funds from a friend or family member or lend money to someone you know. This agreement should specify the amount of money being lent, the interest rate, and the repayment terms. Here is a sample letter of agreement for lending money that you can use as a reference:

[Your name]

[Your address]

[Your city, state, zip code]


[Recipient’s name]

[Recipient’s address]

[Recipient’s city, state, zip code]

Dear [Recipient’s name],

This letter serves as an agreement between us regarding the lending of [Loan Amount] to be paid back with an interest rate of [interest rate] over [Repayment Term] months.

The purpose of this loan is for [Provide reason for loan], and the borrower is [your name]. The lender is [recipient’s name], and the agreement is in effect as of the date written above.

The loan will be repaid in [Number of Repayments] payments of [Amount per Repayment] each, to be made on [Due date for each payment]. The first payment will be due on [Due date for first payment], and subsequent payments will be due on the same date of each month until the loan is paid in full.

The borrower will pay the interest rate of [interest rate] on the outstanding balance of the loan. The borrower has the option to pay off the loan in full at any time without any penalties.

In the event of default, the borrower will be responsible for any collection costs incurred by the lender. Additionally, the borrower agrees to allow the lender to have a security interest in any collateral put up to secure the loan.

Both parties agree to this agreement and acknowledge they fully understand the terms and conditions outlined above. Both parties will sign this letter of agreement and keep a copy for their records.

Thank you for your kind consideration.


[Your name]

[Your signature]

[Recipient’s name]

[Recipient’s signature]


When lending or borrowing money, a clear agreement is essential to avoid any misunderstandings or disputes. By using this sample letter of agreement for lending money, you can ensure that all the terms and conditions are clearly outlined, making it easier for both parties to meet their obligations. Remember to keep a copy for your records, and have both parties sign the agreement.