Personal Loan Agreement Template
A personal loan agreement records a loan between friends, family members, or private parties. Use our free New Zealand template to document principal, interest, and repayment clearly — protecting the relationship and providing evidence if the loan is ever disputed.
What Is a Personal Loan Agreement?
A personal loan agreement is a written contract in which an individual lends money to another individual — often a family member, friend, or partner — on agreed terms for repayment. It is distinct from commercial lending by a bank or finance company, and usually involves smaller amounts, simpler terms, and lower (or zero) interest.
In New Zealand, personal loans between private parties are enforceable contracts under the Contract and Commercial Law Act 2017. The Credit Contracts and Consumer Finance Act 2003 (CCCFA) generally does not apply unless the lender is providing credit "in the course of a business" — a one-off loan between genuine friends or relatives usually falls outside the CCCFA. Making a habit of lending, however, can bring the lender within the CCCFA with all its consumer-protection obligations.
Even though personal loans often feel informal, a written agreement is strongly recommended. It provides evidence of the loan if the borrower later denies receiving it, fixes the repayment expectation in both minds, helps preserve the personal relationship, and supports enforcement in the Disputes Tribunal or District Court if repayment is not made. It also restarts the limitation clock under section 52 of the Limitation Act 2010 if the debt is later acknowledged in writing.
What's Covered in This Template
Our personal loan agreement template captures all the terms a private loan should record, in plain English.
Lender and Borrower Details
Full legal names and addresses of the lender and borrower.
Principal Amount
The exact amount being loaned and the date of the advance.
Interest Rate
Any interest payable (including zero per cent), and how interest is calculated.
Repayment Schedule
Lump sum or instalments, payment dates, and final repayment date.
Payment Method
How payments will be made — bank transfer, automatic payment, or cash.
Purpose of the Loan
Optional statement of the purpose (e.g. home deposit, vehicle, education).
Early Repayment
Whether the borrower can repay early without penalty.
Default
What counts as default and the lender’s right to call in the balance.
Guarantee or Security
Optional personal guarantee or security over an identified asset.
Gift Clause
Optional clause clarifying that any forgiven amount becomes a gift not repayable.
Governing Law
Application of New Zealand law and jurisdiction of NZ courts.
Signatures
Space for both parties to sign and date the agreement.
How to Create a Personal Loan Agreement
Generate a clean, enforceable personal loan agreement in minutes.
- 1
Enter Lender and Borrower Details
Provide full legal names, addresses, and contact details for both parties.
- 2
Set the Principal and Interest
Enter the loan amount, the date of advance, and the interest rate (or 0% for interest-free loans).
- 3
Choose the Repayment Schedule
Decide between a single lump sum at a future date or regular instalments (weekly, fortnightly, monthly).
- 4
Add Security or Guarantee (Optional)
Decide whether to require a personal guarantee or security over an asset.
- 5
Review and Sign
Review the terms carefully, download the PDF, and have both parties sign (ideally in front of an independent witness).
Legal Considerations
Personal loans are simpler than commercial loans but still engage important legal principles.
This template is for informational purposes only and does not constitute legal or financial advice. For significant amounts or complex family arrangements, consider advice from a New Zealand lawyer or accountant.
Reviewed for New Zealand law
CCCFA Application
New Zealand’s Credit Contracts and Consumer Finance Act 2003 regulates consumer credit contracts entered into "in the course of a business" of providing credit. A genuine one-off loan between private individuals is usually outside the CCCFA. However, someone who habitually lends to others (e.g. a person running a side business of small loans) may be caught by the CCCFA and be required to comply with disclosure, affordability, suitability, and interest-rate rules. The New Zealand Commerce Commission enforces these rules. If in doubt, take advice.
Family and Relationship Lending
Loans between partners, from parents to adult children, or between siblings often intersect with relationship property. Under the Property (Relationships) Act 1976, a loan advanced to one partner during the relationship can be treated as their separate debt, relationship debt, or a gift depending on documentation and circumstances. Documenting a loan clearly helps avoid disputes on separation or inheritance.
Limitation and Acknowledgements
Under section 11 of the Limitation Act 2010, most contract claims must be brought within six years of the cause of action accruing. For demand loans, the limitation period usually starts when demand is made. A written acknowledgement or part payment by the borrower restarts the clock (section 52). Personal loan agreements should therefore be revisited if the debt remains unpaid for several years.
Tax Treatment
Interest received on a personal loan is usually taxable income to the lender under the Income Tax Act 2007. Interest-free loans between friends and family are common and do not create taxable interest income, but large interest-free loans from parents to adult children may be reviewed in gift or inheritance contexts. For any loan of substance, take tax advice.
Frequently Asked Questions
Lend to Family or Friends with Clarity
Create a clear, friendly, and enforceable New Zealand personal loan agreement in minutes. Protect the relationship, document the deal.
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