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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 specify how funds must be used, personal loans offer flexibility for various purposes and are often unsecured, although some may require collateral, outlined in the contract. Essential elements of a personal loan include the names and addresses of both parties, their signatures, the state's jurisdiction, the contract date, and the total loan amount.
