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A personal loan agreement is a legal contract between a lender and a borrower for lending money. The lender can be a bank, credit entity, or individual, and the contract is legally binding. Unlike standard loans, which have specific spending requirements, personal loans offer more flexibility for use. While they are often unsecured, some may require collateral, which will be detailed in the contract. Essential components of a personal loan agreement include the names, complete addresses, and signatures of both parties, the state of execution, the contract date, and the total loan amount.
