The Friendly Loan Agreement is designed for situations where individuals wish to formalize a loan arrangement while maintaining the informal nature of their relationship. This document, governed by Danish law, provides a clear framework for documenting loans between friends, family members, or close associates. The agreement includes essential elements such as loan amount, repayment terms, and any applicable interest rates, while complying with Danish legal requirements, particularly the Danish Contracts Act (Aftaleloven) and Interest Act (Renteloven). It's particularly useful for protecting both parties' interests while avoiding the complexity and formality of commercial loan agreements. The document can be customized to include or exclude interest payments, specify flexible repayment terms, and add optional provisions such as early repayment or third-party guarantees.
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Key Requirements PROMPT example:
Friendly Loan Agreement
I need a Friendly Loan Agreement for lending 50,000 DKK to my sister-in-law, interest-free, to be repaid in full by March 2025, with the option for early repayment without penalties.
1. Parties: Identifies and provides full details of the lender and borrower, including names, addresses, and contact information
2. Background: Brief context of the friendly loan arrangement and the relationship between the parties
3. Definitions: Defines key terms used in the agreement for clarity
4. Loan Amount and Purpose: Specifies the exact amount being lent and the intended purpose of the loan
5. Interest Rate: States whether interest applies and if so, the agreed rate (even if zero)
6. Repayment Terms: Details of how and when the loan will be repaid, including payment schedule if applicable
7. Default and Late Payment: Explains consequences of missed payments or default, even if minimal
8. Representations and Warranties: Basic statements about the borrower's ability to repay and the lender's right to lend
9. Governing Law: Confirms Danish law governs the agreement
10. Signatures: Space for both parties to sign and date the agreement
1. Early Repayment: Include when parties want to explicitly allow early repayment without penalty
2. Security: Include if any assets are being provided as security for the loan
3. Death or Incapacity: Include when parties want to address what happens to the loan in case of death or incapacity
4. Third-Party Guarantor: Include if someone is guaranteeing the loan
5. Dispute Resolution: Include if parties want to specify mediation before legal proceedings
6. Amendment Process: Include if parties want to specify how changes to the agreement can be made
1. Schedule 1 - Repayment Schedule: Detailed breakdown of repayment dates and amounts, if installment payments are planned
2. Schedule 2 - Security Details: Description of any security provided, if applicable
3. Appendix A - Proof of Transfer: To be attached once the loan amount is transferred, showing the transaction details
4. Appendix B - Related Communications: Any relevant email or written communications discussing loan terms
Authors
Relevant legal definitions
Clauses
Relevant Industries
Personal Finance
Small Business
Family Business
Private Lending
Informal Banking
Social Enterprise
Non-Profit
Community Organizations
Relevant Teams
Legal
Finance
Private Banking
Wealth Management
Personal Advisory
Risk Management
Compliance
Family Office
Estate Planning
Relevant Roles
Personal Financial Advisor
Family Office Manager
Small Business Owner
Private Wealth Manager
Community Organization Director
Legal Counsel
Financial Planner
Estate Manager
Personal Banking Advisor
Non-Profit Director
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