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A personal loan agreement is a legal contract between a lender and borrower for lending money, which can involve banks, credit entities, or individuals. It is binding and differs from standard loans, which dictate specific usage of funds, like student loans or mortgages. Personal loans offer more flexibility and can be unsecured, though some may require collateral. Essential elements of a personal loan include the names, addresses, and signatures of both parties, the state of execution, the contract date, and the total loan amount.