Loan Agreement - Personal - Delaware

PERSONAL LOAN AGREEMENT — DELAWARE

Before you use this: This form is for one unsecured private loan to an individual for personal or household use, with principal of $100,000 or less. The lender must make no more than five loans in any 12-month period. Before signing, enter the Federal Reserve discount rate including any surcharge and choose a fixed rate no more than five percentage points above it. No added lending charge is allowed under this form.

This agreement is made on [__/__/____] between [LENDER FULL LEGAL NAME], of [LENDER ADDRESS] ("Lender"), and [BORROWER FULL LEGAL NAME], of [BORROWER ADDRESS] ("Borrower").

Principal: $[AMOUNT] (not more than $100,000)
Number of loans made by Lender during the preceding 12 months, including this loan: [____] (not more than 5)

Federal Reserve discount rate, including surcharge, checked on [__/__/____]: [____]%
Maximum rate for this form (line above + 5 percentage points): [____]%
Agreed annual simple interest rate (must not exceed maximum): [____]% (enter 0 for an interest-free loan)

Loan and funding

Lender agrees to advance the principal above to Borrower on [__/__/____] by [TRANSFER METHOD]. Borrower will use the funds for [PERSONAL OR HOUSEHOLD PURPOSE]. This loan is unsecured. Lender will give Borrower written confirmation of the amount and date actually advanced. Borrower's repayment obligation begins when funds are advanced.

Interest and repayment

Interest accrues only on unpaid principal at the agreed annual simple rate above. For each day, interest equals unpaid principal multiplied by the agreed annual rate divided by 365 if that day falls in an ordinary calendar year, or by 366 if it falls in a leap calendar year. Interest does not compound. Borrower will pay $[AMOUNT] first on [__/__/____] (choose a date after the advance from the 1st through the 28th), then on that same day of each following month until the final due date or earlier full payment. No installment exceeds the remaining principal and accrued interest then due. All unpaid principal and accrued interest are due on [__/__/____] (on or after the first scheduled payment date). Payments apply first to accrued interest, then to principal. Borrower may prepay all or part at any time without a charge; a partial prepayment does not postpone the next scheduled due date unless the parties sign a change.

Neither party may add an origination fee, late fee, default interest, or prepayment penalty under this agreement. The rate and payments written here are the entire consideration for making the loan.

Missed payment and collection

If a payment is more than [____] days late, Lender may give Borrower written notice of the missed amount. If Borrower does not pay it within [____] days after receiving the notice, Lender may declare the unpaid principal and accrued interest immediately due. Lender may pursue payment through lawful remedies, subject to applicable limitation periods and collection law. A default does not increase the agreed interest rate.

Notices and changes

Notices may be delivered personally or mailed to the addresses above, or to a replacement address given in writing. Changes to this agreement must be written and signed by both parties. Delaware law governs this agreement. This is the parties' entire agreement for this advance.

Lender signature: ______________________________ Date: [__/__/____]
Printed name: [________________________________]

Borrower signature: ______________________________ Date: [__/__/____]
Printed name: [________________________________]

Delaware law reference

Under 5 Del. C. § 2202(a), a person making no more than five loans in any 12-month period is not deemed to transact the business of lending money, and those unlicensed loans ordinarily fall under 6 Del. C. Chapter 23. Section 2301(a) permits written interest no more than five percentage points above the Federal Reserve discount rate including surcharge. The parties must complete the rate calculation above before signing. A judgment on an agreement governed by § 2301(a) bears the lesser of the contract rate or the statutory discount-rate-plus-five rate after judgment; the judgment controls.

10 Del. C. § 8106(a) generally gives three years after accrual for an action based on a promise, expressly subject to specified exceptions including § 8109. Section 8109 gives six years after accrual for an action arising from a promissory note, bill of exchange, or signed acknowledgment of a subsisting demand. The applicable period depends on the claim and debt document; signing this agreement does not establish that the general three-year period necessarily governs.