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A personal loan agreement is a legal contract between a lender and a borrower for lending money, enforceable in all situations. Unlike standard loans, which specify how funds must be utilized (e.g., student loans or mortgages), personal loans offer flexibility in their use. They are typically unsecured, meaning they aren't tied to assets like homes or cars, though some may require collateral, with terms specified in the contract. Essential elements of a personal loan include the names and addresses of both parties, their signatures, the state of execution, the contract date, and the total loan amount.