On Demand Loan Agreement Template for Ireland

An On Demand Loan Agreement gives you the flexibility to structure a loan where the lender can request immediate repayment at any time. Unlike traditional term loans with fixed repayment schedules, this arrangement provides maximum control for lenders while offering borrowers access to funds when needed. In Ireland, these agreements are particularly valuable for business relationships, family loans, and short-term financing arrangements.

When do you need this document?

You'll need an On Demand Loan Agreement when establishing a flexible lending arrangement where the lender requires the right to call in the loan without advance notice. This is common in inter-company lending within corporate groups, where parent companies provide funding to subsidiaries with the ability to recall funds as business needs change. Family members often use these agreements for personal loans where the lender wants security but doesn't want to impose rigid repayment terms. Property developers and contractors frequently rely on on-demand facilities to manage cash flow during projects, allowing them to draw funds as needed while giving lenders confidence they can recover their money quickly if circumstances change.

Key legal considerations

The most critical aspect of any on-demand loan is clearly defining the circumstances and process for demanding repayment. Your agreement must specify the notice period required (if any) and the method for making the demand, whether by written notice, email, or other agreed communication. Interest calculation provisions need careful attention, particularly how interest accrues and compounds, and whether different rates apply in default situations. If you're securing the loan against property or other assets, you'll need comprehensive security clauses that comply with Irish registration requirements. Consider including guarantor provisions if additional security is needed, ensuring all guarantors understand their unlimited liability. Default events should be clearly defined beyond just failure to repay on demand, including insolvency, breach of other obligations, or material adverse changes in the borrower's financial position.

Legal requirements in Ireland

In Ireland, your On Demand Loan Agreement must comply with the Consumer Credit Act 1995 if the borrower is an individual and the loan is for personal use, requiring specific disclosure documents and cooling-off periods. The Central Bank's Consumer Protection Code applies to regulated lenders, mandating fair treatment principles and clear communication of terms. Anti-money laundering regulations under the Criminal Justice Act 2010 require lenders to verify borrower identity and source of funds, particularly for large loan amounts. The European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 protect consumer borrowers from unreasonable terms that create significant imbalance between parties' rights. If you're registering security interests, you must comply with Companies Registration Office requirements for charges against company assets. Professional lenders need appropriate Central Bank authorization, while private lenders should ensure their activities don't trigger licensing requirements.