Free Personal Loan Agreement Template

PERSONAL LOAN AGREEMENT

England And Wales  ·  Executed As A Deed  ·  4.5% Per Annum

This Personal Loan Agreement (this "Agreement") is executed as a deed on 2026-04-01 between Robert James Hughes of 19 Elm Road, Oxford OX1 3BT (the "Lender") and Laura Amara Patel of 7 Birch Close, Oxford OX2 6FT together with David Edward Patel of 7 Birch Close, Oxford OX2 6FT (together, the "Borrowers"). The Borrowers shall be jointly and severally liable for all obligations under this Agreement. The parties agree as follows:

The Lender agrees to lend to the Borrowers, and the Borrowers agree to borrow from the Lender, the principal sum of £15,000.00 (the "Loan") for the purpose of Home repairs and replacement boiler installation. The Loan shall be advanced by bank transfer (BACS / Faster Payment) on or before 2026-04-05. The Borrowers acknowledge that the Loan shall be deemed advanced on receipt by the Borrowers or credit to the nominated account.

The Borrowers warrant that the Loan shall not be applied for any unlawful purpose and (where relevant) has the legal capacity to enter into this Agreement.

Interest shall accrue on the outstanding principal balance of the Loan at the fixed rate of 4.5% per annum, calculated on a daily basis from (and including) the disbursement date to (but excluding) the date of repayment in full, and compounded annually on each anniversary of the disbursement date.

The representative APR applicable to the Loan is 4.6% APR, calculated in accordance with the Consumer Credit (Total Charge for Credit) Regulations 2010.

Interest shall be payable together with each monthly instalment. No interest shall accrue on amounts not yet advanced.

The Borrower shall repay the Loan (together with accrued interest, if any) by 54 equal monthly instalments of £300.00. The first instalment shall be due on 2026-05-01. Each subsequent instalment shall be due on the same day of each succeeding month until the Loan is repaid in full. All payments shall be made by electronic transfer to the Lender's account identified as Lloyds Bank
Sort code: 30-00-00
Account: 12345678
Account holder: Robert James Hughes, or to such other account as the Lender may notify in writing.

Each instalment shall be applied first in discharge of any costs or fees lawfully payable, secondly in discharge of accrued interest, and thirdly in reduction of the outstanding principal. The final instalment shall include any balancing amount necessary to discharge the Loan in full.

Each of the following is an "Event of Default": (a) non-payment of any sum due under this Agreement for 14 days after the due date; (b) any material breach of this Agreement which, if capable of remedy, is not remedied within 14 days of written notice; (c) the Borrower becoming insolvent, bankrupt, entering into an IVA or debt-relief order; (d) any enforcement action being taken against the Borrower's assets; or (e) any representation made by the Borrower being found to be untrue or misleading in a material respect.

On an Event of Default, the Lender may, by written notice, require payment of any overdue sum and reserve all other rights and remedies available at law.

The parties acknowledge that the Lender is not carrying on the business of lending money and is not entering into this Agreement in the course of a consumer credit business regulated by the Financial Conduct Authority. Accordingly, this Agreement is a non-commercial agreement for the purposes of section 189(1) of the Consumer Credit Act 1974 and is exempt from the regulatory requirements applicable to regulated consumer credit agreements.

The Borrower may at any time repay the Loan in whole or in part without penalty, premium or break cost. Any partial early repayment shall be applied in accordance with clause 3 above and shall proportionately reduce subsequent instalments (or reduce the term, at the Borrower's written election).

On the occurrence of an Event of Default, the Lender may, by written notice to the Borrower, declare the entire outstanding balance of the Loan (together with all accrued interest and any unpaid charges) immediately due and payable.

Any sum not paid by its due date shall bear late payment interest at 8% per annum above the Bank of England base rate from the due date until payment in full, accruing daily and compounding annually. Where this Agreement is entered into in the course of business by both parties, statutory interest at 8% above the Bank of England base rate is mandatory under the Late Payment of Commercial Debts (Interest) Act 1998 (as strengthened by the UK Late Payment Reform announced on 24 March 2026, which rendered waiver clauses void). The Lender shall also be entitled to recover all reasonable costs and expenses of enforcement, including legal costs on an indemnity basis, subject to the court's discretion.

The Lender confirms that the Loan funds derive from legitimate sources and are not the proceeds of crime within the meaning of the Proceeds of Crime Act 2002. The Borrower may be required to provide proof of identity and address in accordance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) as amended in 2022 and 2023, where the loan amount or aggregate transactions exceed regulatory thresholds. Both parties agree to retain documentation evidencing the source of funds and the bona fide nature of this Agreement for a minimum of five (5) years from the date of final settlement, to assist with any HMRC, HMRC Anti-Money-Laundering Supervision Team, or law-enforcement enquiry.

The parties confirm that no false or misleading information has been given to the other about the nature of this Agreement, the cost of credit, the consequences of default or the source of the Loan funds. Giving false or misleading information about a consumer's financial obligations is an offence under section 226 of the Digital Markets, Competition and Consumers Act 2024, enforceable by the Competition and Markets Authority and local trading standards from 6 April 2025.

The Loan is secured by a personal guarantee from the guarantor named below.

Guarantor: Margaret Anne Hughes, of 19 Elm Road, Oxford OX1 3BT, DOB 1966-08-30. The Guarantor unconditionally and irrevocably guarantees the due and punctual payment by the Borrower of all sums owing under this Agreement, as principal obligor and not merely as surety. The guarantee is a continuing security and shall not be discharged by any variation of this Agreement, any time or indulgence given to the Borrower, or any other act or omission which would (but for this provision) discharge a surety. The Guarantor has been advised to take independent legal advice on the terms of this guarantee and confirms that they have done so or have knowingly chosen not to.

The Borrower may request a repayment holiday in cases of genuine financial hardship (such as unemployment, serious illness, or bereavement) on the following terms:

Up to two repayment holidays of three (3) consecutive months each within any 24-month period, on 14 days' written notice supported by evidence of hardship (P45, sick-note, bereavement certificate). Interest continues to accrue during the holiday and the term is extended accordingly.

The Lender shall process the Borrower's and each joint Borrower's personal data only for the purpose of administering and enforcing this Agreement, in accordance with the Data Protection Act 2018 as amended by the Data (Use and Access) Act 2025 (SI 2026/82 in force 5 February 2026) and the UK GDPR. The Lender shall additionally provide the Borrower with the Lender's privacy notice on or before signature, shall not disclose Borrower data to credit reference agencies without the Borrower's prior written consent, and shall delete personal data within 6 years of full repayment of the Loan unless required to retain for limitation or regulatory purposes.

Personal Savings Allowance (PSA): The Lender notes that interest received on this Loan is potentially subject to UK income tax. For the 2026/27 tax year, the Lender's Personal Savings Allowance is £1,000 (basic rate), £500 (higher rate), or £0 (additional rate). Interest received above this allowance must be reported on the Lender's Self Assessment tax return; HMRC may also collect tax through PAYE coding.

Gift / loan distinction: The parties confirm that this Agreement creates a genuine loan obligation. If the Loan is later forgiven by the Lender during lifetime or on death, the forgiveness may be treated as a gift for Inheritance Tax purposes under section 5 of the Inheritance Tax Act 1984.

Connected persons: Where the Lender and Borrower are connected persons within the meaning of section 270 of the Inheritance Tax Act 1984, the Lender's personal representatives may need to treat any outstanding loan balance at death in accordance with section 103 IHTA 1984 (loans to spouse / civil partner or relative — deemed value).

This Agreement is executed as a deed in accordance with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989. Each party shall sign in the presence of an attesting witness aged 18 or over who is not a party to this Agreement and (in respect of the Borrower) is not also the Lender or the Lender's spouse / civil partner. Execution as a deed extends the limitation period for enforcement to twelve (12) years from the date the cause of action accrued, in accordance with section 8 of the Limitation Act 1980 (twice the standard 6-year simple-contract limitation period under section 5).

This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales. The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any such dispute or claim.

Entire Agreement: This Agreement constitutes the entire agreement between the parties in respect of the Loan and supersedes any prior written or oral understanding.

Variation: No variation of this Agreement shall be effective unless in writing and executed as a deed with the same formalities as this Agreement.

Severability: If any provision is found to be unenforceable, the remaining provisions shall continue in full force and effect.

Notices: Any notice shall be in writing and delivered personally, sent by pre-paid first-class post, or sent by email to the party's address set out above.

No waiver: No failure or delay by the Lender in exercising any right or remedy shall operate as a waiver of that or any other right or remedy.

Third-Party Rights: A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

Limitation: The limitation period applicable to any claim under this Agreement is twelve (12) years from the date on which the cause of action accrued, in accordance with section 8 of the Limitation Act 1980 (deed).

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.