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A personal loan agreement is a legal contract between a lender and a borrower for borrowing money. Lenders can be banks, credit entities, or individuals, and the agreement is legally binding. Unlike standard loans, which dictate how funds must be used (e.g., student loans, mortgages), personal loans offer flexibility in spending. They are often unsecured, meaning they don't require collateral, although some might. Essential elements of a personal loan include the names and addresses of the borrower and lender, their signatures, the state of execution, the contract date, and the total loan amount.