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A loan agreement is a written contract between a borrower and lender outlining the terms for the repayment of borrowed money. It is primarily based on the borrower’s promise to repay the loan according to an agreed schedule, which may involve regular payments or a lump sum. Loan agreements are beneficial for lenders as they provide legal enforcement for repayment. Various types of loan agreements exist, including those for business, personal, home equity, car, and student loans. Additionally, other loan-related documents include a family loan agreement for borrowing within families and an IOU, which is a simple acknowledgment of borrowed money without detailed repayment terms or interest rates.
