Loan agreement
A full loan-agreement template between individuals: what each clause means, how to fill it in, and which mistakes most often make an agreement weak.
When an agreement is needed at all
Formally the Civil Code does not require a written form for a simple loan between individuals — the agreement is deemed concluded from the moment the money is handed over (Art. 6.870). In practice, though, a written document is the only thing that lets you prove the terms in a dispute. A verbal agreement between two people without a witness is almost unprovable, which is exactly why an agreement is needed even when the parties trust each other.
Mandatory elements of the agreement
- Identification of the parties: name, personal code, declared address;
- The loan amount in figures and words;
- Repayment term with a specific date;
- Interest rate, stated as annual (if interest is agreed);
- Repayment schedule or a single payment;
- Late-payment penalty;
- Method of transferring the money and the account number (IBAN);
- Dispute-resolution procedure;
- Date, place and both parties' signatures.
Printable template
LOAN AGREEMENT No. ___
Vilnius, _____________ (date)
Lender: ____________________ (name), personal code ___________, address: ___________________ — hereinafter the Lender.
Borrower: ____________________ (name), personal code ___________, address: ___________________ — hereinafter the Borrower.
1. Subject. The Lender lends the Borrower __________ EUR (_____________ euro), and the Borrower undertakes to repay the sum received under this agreement.
2. Repayment term. The Borrower undertakes to repay the principal by _____________ (date).
3. Interest. Annual interest rate — _____ %. Interest is calculated on the outstanding principal.
4. Schedule. The Borrower pays a monthly instalment of __________ EUR by the ___ day of each month.
5. Late-payment penalty. For a delay the Borrower pays a 0.05% penalty of the overdue amount per day of delay.
6. Transfer. The loan is transferred to the Borrower's account No. _________________ (IBAN).
7. Early repayment. The Borrower may repay early. In that case interest is calculated for the actual time the money was used.
8. Notices. The parties send notices to the addresses or emails stated: ____________________ / ____________________.
9. Disputes. Disputes are resolved by a court of the Republic of Lithuania at the defendant's place of residence.
10. Annexes. Copies of the parties' identity documents.
Lender:
___________________
(signature)Borrower:
___________________
(signature)
When a notary is needed
Notarisation is not mandatory, but a notarised agreement has a practical advantage: in a dispute you need not go through the whole court process, because the notary's writ of execution lets you go straight to a bailiff. For larger amounts this cost usually pays off.
Electronic signature
The agreement can be signed electronically. In Lithuania a qualified electronic signature (e.g. Smart-ID, mobile signature, ID card) is legally equivalent to a handwritten one, and a document signed this way is as valid as a paper one. A plain scan of a photographed signature is a weaker position: together with correspondence and the payment order it forms a body of evidence, but it is weaker than an original or a qualified e-signature.
The norms the agreement rests on
The basis is Articles 6.870–6.875 of the Civil Code: the loan arises on handing over the money, interest is agreed separately, and with no term the money is repaid within 30 days of demand (Art. 6.873). In a deal between two individuals a court resolves disputes, not the Bank of Lithuania. Wider context — on the page legal basis.
Legal texts — e-seimas.lrs.lt. Informational material.
Questions and answers about the template
Is this template legally binding?
The template itself is not a document — what the parties fill in and sign becomes binding. The form can be freely adapted.
Does the agreement need a notary?
Not required. A notary becomes important for large amounts and when property is pledged, since a pledge needs registration.
Is a loan valid without a written agreement?
Yes. The loan arises on handing over the money, but without a document you must prove both the amount and the terms in a dispute, which usually fails.
What to write in the payment reference?
“Loan under agreement of dd.mm.yyyy.” The same reference is used in repayment payments to separate principal from interest.
How long to keep the documents?
Until the limitation period ends, not until the last payment. After full repayment a written confirmation of no claims is useful too.