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A personal loan agreement is a legal contract between a lender and a borrower for lending money, which can be from a bank, credit entity, or individual. It is binding under all circumstances. Personal loans are flexible and can be used for various purposes, unlike standard loans that have specific spending guidelines. Collateral may be required for security, and terms should be in the contract. The agreement must include names, addresses, signatures, state of execution, date, total loan amount, terms, repayment schedule, interest rate, and consequences for default.
