Simple Loan Agreement Between Friends Template for Malaysia

The Simple Loan Agreement Between Friends is designed for use in Malaysia when individuals wish to formalize a personal loan arrangement with a friend while maintaining legal validity. This document is particularly useful when friends wish to establish clear terms for lending and borrowing money, providing protection for both parties while preserving the informal nature of their relationship. It includes essential provisions required under Malaysian law, such as loan amount, repayment terms, and any interest arrangements, while remaining simple enough for non-legal users to understand. The agreement complies with Malaysian legal requirements, including the Contracts Act 1950 and civil law provisions, making it enforceable while avoiding the complexity of commercial loan agreements. It's suitable for various loan amounts and purposes, from small personal loans to larger amounts for business or property purposes, provided they remain within the bounds of personal lending.

1. Parties: Identifies the lender and borrower with full legal names and addresses

2. Background: Brief context of the friendly loan arrangement and relationship between parties

3. Definitions: Defines key terms used in the agreement for clarity

4. Loan Amount and Purpose: Specifies the principal amount being lent and its intended use

5. Repayment Terms: Details of how and when the loan will be repaid, including payment schedule

6. Interest: Specifies whether interest applies and if so, the rate and calculation method

7. Method of Payment: Acceptable payment methods and account details for repayment

8. Default: Consequences of missing payments or breaching the agreement

9. Termination: Conditions under which the agreement can be terminated

10. Governing Law: Specifies that Malaysian law governs the agreement