The Simple Interest Loan Agreement is commonly used in India for both personal and business lending arrangements where parties prefer a straightforward interest calculation method. This document is particularly suitable when clarity and simplicity in interest computation are prioritized, making it popular among individual lenders, small businesses, and traditional financial institutions. The agreement complies with Indian financial regulations and contract law, incorporating essential provisions for loan amount, interest calculation, repayment schedule, and default consequences. It's especially relevant in situations where the lender and borrower want to avoid compound interest complications and prefer a transparent lending structure. The document can be customized to include security provisions, guarantors, or special conditions while maintaining its core simple interest characteristic.

1. Parties: Identifies and provides full details of the lender and borrower, including names, addresses, and any registration details for companies

2. Background: Brief context of the loan arrangement and the parties' intention to enter into the agreement

3. Definitions: Defines key terms used throughout the agreement for clarity and consistency

4. Loan Amount and Purpose: Specifies the principal amount being lent and the approved purpose of the loan

5. Interest Rate and Calculation: Details the simple interest rate and how interest will be calculated

6. Term and Repayment: Specifies the duration of the loan and the repayment schedule

7. Mode of Payment: Describes the approved methods of payment and payment details

8. Representations and Warranties: Standard declarations by the borrower about their legal capacity and financial condition

9. Borrower's Covenants: Ongoing obligations of the borrower during the loan term

10. Events of Default: Lists circumstances that constitute default and their consequences

11. Remedies: Lender's rights and remedies in case of default

12. Notices: How formal communications between parties should be made

13. Governing Law and Jurisdiction: Specifies Indian law as governing law and sets jurisdiction for disputes

14. Miscellaneous: Standard boilerplate provisions including amendments, waivers, and severability