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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 an individual. Unlike standard loans that dictate specific spending (e.g., student loans, mortgages), personal loans are more flexible and can be used for various purposes. They are often unsecured, meaning they aren't tied to assets like homes or cars, though some may require collateral, detailed in the contract. Essential components of a personal loan include the names and addresses of both parties, their signatures, the execution state, the contract date, and the total loan amount.
