The Simple Unsecured Loan Agreement is a fundamental financial instrument used in India when extending credit without requiring collateral or security. This document is typically employed when the lender is willing to provide financing based solely on the borrower's creditworthiness, financial standing, or future income potential. The agreement comprehensively covers loan terms, interest calculations, repayment schedules, and default provisions, all within the framework of Indian law. It's particularly useful for personal loans, business working capital, or situations where the loan amount or relationship between parties doesn't warrant securing assets. The document ensures compliance with Indian financial regulations while providing clear documentation of the lending arrangement and protecting both parties' interests through well-defined terms and conditions.

1. Parties: Identifies and provides full details of the lender and borrower including names, addresses, and other contact information

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

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

4. Loan Amount and Purpose: Specifies the principal amount of the loan and its intended use

5. Interest Rate: Details the applicable interest rate, calculation method, and compounding frequency

6. Repayment Terms: Outlines the repayment schedule, payment methods, and prepayment provisions

7. Representations and Warranties: Statements of fact by the borrower about their financial condition and ability to repay

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

9. Events of Default: Defines circumstances that constitute default and their consequences

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

11. Notices: Specifies how formal communications between parties should be made

12. Governing Law and Jurisdiction: Specifies Indian law as governing law and identifies courts having jurisdiction

13. Execution: Signature blocks and execution formalities