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A personal loan agreement is a legal contract between a lender and a borrower for lending money. The lender may be a bank, credit entity, or individual, and the contract is legally binding. Unlike standard loans, which restrict fund usage (e.g., student loans, mortgages), personal loans offer flexibility and can be used for various purposes. They are typically unsecured, meaning they’re not tied to an asset, though some may require collateral. Essential items to include in a personal loan contract are the names, complete addresses, and signatures of both parties, the state of execution, the contract date, and the total loan amount.
