The Loan Letter is a widely used document in Dutch financing transactions, offering a more streamlined alternative to full loan agreements while maintaining legal effectiveness. It is particularly suitable for straightforward lending arrangements where parties prefer a less formal approach but still require legal certainty. The document must comply with Dutch civil law requirements (Burgerlijk Wetboek) and, where applicable, financial regulations and consumer protection laws. A Loan Letter typically includes essential terms such as loan amount, interest rates, repayment schedules, and any security arrangements, while being adaptable to various lending scenarios from personal loans to business financing. The letter format makes it particularly suitable for smaller loans, intra-group lending, or situations where maintaining business relationships is paramount while ensuring legal protection.

1. Date and Address Block: Recipient's name, address, and date of the letter

2. Salutation: Formal greeting to the recipient

3. Reference Line: Subject line identifying the purpose as a loan confirmation

4. Loan Amount and Basic Terms: Clear statement of the principal amount, currency, and purpose of the loan

5. Interest Rate: Specification of the interest rate, calculation method, and payment frequency

6. Repayment Terms: Details of repayment schedule, payment methods, and due dates

7. Security and Collateral: Description of any security or collateral required for the loan

8. Conditions Precedent: Any conditions that must be met before the loan is advanced

9. Default Provisions: Consequences of missing payments or other defaults

10. Closing and Signature Block: Formal closing, signature lines for both parties