Family Loan Agreement: What to Include (Free Template)

Everything you need in a family loan agreement to avoid confusion and protect relationships.

Everything you need in a family loan agreement to avoid confusion and protect relationships.

You are lending money to family. Smart move to put it in writing. Here is exactly what your agreement should include.

Why You Need a Written Agreement

Memory is unreliable. What you remember as "pay me back by June" your cousin remembers as "pay me back whenever." Written agreements prevent these misunderstandings.

What to Include

1. Names and Date Full names of both parties and the date of the agreement.

2. Loan Amount The exact amount being lent. Be specific: "$5,000" not "around five thousand."

3. Purpose (Optional) What the money is for. "For car repairs" or "for security deposit on apartment."

4. Repayment Terms - When payments start - How much each payment will be - How often (weekly, monthly, etc.) - Final payoff date if applicable

5. Interest (If Any) Most family loans are interest-free. If you are charging interest, state the rate clearly.

6. What If Payments Are Missed What happens if they cannot pay one month? Agree on this upfront.

7. How Payments Will Be Made Venmo, cash, bank transfer? Agreeing on the method avoids confusion.

Simple Template

Here is a template you can use:

Family Loan Agreement

Date: [DATE]

Lender: [YOUR NAME] Borrower: [THEIR NAME]

Loan Amount: $[AMOUNT]

Purpose: [REASON FOR LOAN]

Repayment Terms: - Monthly payments of $[AMOUNT] - Starting [DATE] - Due on the [DAY] of each month

Interest: None

Missed Payments: Borrower will notify lender in advance if a payment will be late.

Payment Method: [VENMO/CASH/BANK TRANSFER]

Signed: _________________ (Lender) _________________ (Borrower)

Even Simpler: Use an App

A tool like JimBondy creates a shared record automatically. Both parties see the same terms, payments are tracked, and nothing gets lost.

The goal is clarity, not legal complexity.