Loan Agreement Between Individuals Template for Saudi Arabia

The Loan Agreement Between Individuals is essential for documenting personal lending transactions in Saudi Arabia. This document type is specifically designed to comply with both Saudi civil law and Islamic Sharia principles, making it suitable for use when one individual wishes to lend money to another in a legally binding and Sharia-compliant manner. The agreement covers crucial elements such as the principal amount, purpose of the loan, repayment schedule, and any security arrangements, while ensuring no interest (Riba) is charged in accordance with Islamic finance principles. It is commonly used for personal financing needs such as property purchase, business startup, or personal expenses, and includes all necessary provisions for enforceability under Saudi jurisdiction, including witness requirements and optional guarantor arrangements.

1. Parties: Identification of the lender and borrower with full legal names and contact details

2. Background: Context of the loan arrangement and confirmation of Sharia compliance

3. Definitions: Key terms used throughout the agreement

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

5. Disbursement: Terms and conditions for the transfer of the loan amount

6. Repayment Terms: Schedule and method of repayment, explicitly stating no interest charges

7. Security: Details of any assets or guarantees provided as security for the loan

8. Representations and Warranties: Statements of fact by both parties regarding their capacity and authority

9. Events of Default: Circumstances constituting default and consequences

10. Termination: Conditions and process for early termination or full repayment

11. Notices: Communication methods and contact details for official notices

12. Governing Law and Jurisdiction: Confirmation of Saudi law application and Sharia compliance

13. Execution: Signature blocks and execution requirements