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A personal loan agreement is a legal contract between a lender and a borrower for lending money. The lender can be a bank, a formal credit entity, or an individual, and the contract is legally binding. Unlike standard loans, which specify how funds must be used (e.g., student loans, mortgages), personal loans offer more flexibility in use. They are often unsecured, meaning they do not require collateral, although some may include collateral terms. A personal loan must include the names, complete addresses, and signatures of both parties, the state of execution, the contract date, and the total loan amount.