Loan Agreement Template for the US: Clauses and Law That Apply (2026)

What is a US loan agreement, and when do you need one? A US loan agreement is a contract in which a lender lends money to a borrower who promises to repay it, usually with interest, on agreed terms. It is more detailed than a promissory note, which is a shorter promise to pay. You use a loan agreement whenever the loan is large, secured by collateral, or carries conditions the lender wants in writing. In the US two bodies of law shape it: state usury law, which caps the interest rate, and, for consumer loans, the federal Truth in Lending Act, which requires clear cost disclosures. Business loans are often treated differently from consumer loans. This article is general guidance, not legal advice. Usury and lending rules are state-specific and change, and consumer lending is heavily regulated, so have a qualified professional review a loan before you rely on it. Last verified October 2026. ## US loan agreement template Copy the block below and fill the bracketed fields. ```

LOAN AGREEMENT This Loan Agreement ("Agreement") is made on [DATE] BETWEEN: [LENDER NAME], of [address] ("Lender") AND [BORROWER NAME], of [address] ("Borrower") 1. LOAN AMOUNT The Lender lends the Borrower [PRINCIPAL AMOUNT] (the "Loan"), advanced on [DATE] by [method]. 2. INTEREST Interest accrues on the unpaid principal at [RATE]% per year, [simple / compounded [period]]. The rate will not exceed the maximum allowed by the governing state's usury law. 3. REPAYMENT The Borrower will repay the Loan by [lump sum on [DATE] / [N] monthly instalments of [AMOUNT] beginning [DATE]]. Payments apply first to accrued interest, then to principal. 4. PREPAYMENT The Borrower may prepay in whole or part at any time [without penalty / with a prepayment fee of [AMOUNT]]. 5. SECURITY (if any) The Loan is [unsecured] OR [secured by [COLLATERAL], and the Borrower grants the Lender a security interest the Lender may perfect by filing]. 6. DEFAULT The Borrower is in default if it misses a payment by [N] days, becomes insolvent, or breaches this Agreement. On default, after any required notice and cure period, the Lender may declare the whole balance due. 7. LATE CHARGES AND COSTS Late payments carry [a late fee / default interest] allowed by law. The Borrower pays the Lender's reasonable collection costs, including lawful attorney's fees. 8. REPRESENTATIONS The Borrower represents it has authority to borrow and that the information it gave the Lender is accurate. 9. GOVERNING LAW This Agreement is governed by the laws of the State of [STATE]. 10. CONSUMER DISCLOSURES (consumer loans only) If this is a consumer loan, the required Truth in Lending disclosures, including the finance charge and annual percentage rate, are provided separately as the law requires. Signed - Lender: __________ Borrower: __________ Name / date Name / date

- **Repayment (clause 3).** Choose a lump sum or instalments, set the dates, and say how payments are applied between interest and principal.
- **Security (clause 5).** If the loan is secured, describe the collateral and say the lender may perfect its security interest by filing. A perfected interest ranks ahead of later creditors.
- **Default (clause 6).** Define what counts as default, give any required notice and cure period, and allow acceleration of the whole balance.
- **Consumer disclosures (clause 10).** If the borrower is a consumer, the Truth in Lending Act requires disclosures such as the finance charge and the annual percentage rate. Business loans are generally outside the Act. ## Common mistakes to avoid - Setting a rate above the state usury cap, which can cost the lender interest or more.
- Treating a consumer loan like a business loan and skipping the required federal disclosures.
- No clear default and acceleration clause, so the lender cannot call the loan on non-payment.
- Taking collateral but never perfecting the security interest, leaving the lender unsecured in practice.
- Confusing a promissory note with a full loan agreement when the deal needs conditions and covenants. ## A note on jurisdiction and current law - **Usury is state law.** There is no single federal interest-rate cap. Each state sets its own usury limits, often with different caps for different types of lender or loan, and some states have very light limits for business loans. Penalties for charging above the cap range from losing the excess interest to losing all interest or more. <!-- [VERIFY: specific state usury caps and exemptions change; confirm the governing state's current statute] -->
- **Truth in Lending Act.** For consumer credit, the federal Truth in Lending Act, carried out through Regulation Z, requires clear disclosure of the cost of credit, including the finance charge and the annual percentage rate. The Act is about disclosure; it does not cap rates. It applies to natural-person borrowers in consumer transactions, not to most business loans.
- **Secured loans.** A security interest in personal property is created and perfected under Article 9 of the Uniform Commercial Code, usually by filing a financing statement. Real estate collateral uses a mortgage or deed of trust under state law.
- **Promissory note vs loan agreement.** A promissory note is a one-sided promise to pay; a loan agreement is a fuller contract with conditions, covenants, and default terms. Large or secured loans usually use both. ## Where a contract workspace helps A template gives you a sound loan agreement, but the real work is keeping it right over time: holding interest within each state's usury cap, tracking payment and maturity dates, and keeping security filings and signed versions straight across every loan you make. Drafting a loan from terms that fit how your company lends, flagging risky clauses, editing in plain language and watching key dates can all live in one AI workspace rather than several tools. [Adira](https://adiralaw.com) is one workspace built along these lines. The template is enough to get a fair loan on paper; the workspace simply joins the drafting, review and tracking.