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A loan agreement is a written contract between a borrower and a lender that outlines the terms for repaying borrowed money. Its foundation lies in the borrower's promise to repay according to an agreed repayment schedule, either through regular payments or a lump sum. Loan agreements enforce the obligation for repayment and are useful in various contexts, including business, personal, home equity, car, and student loans. Different types of loan agreements exist, such as family loan agreements, which involve borrowing money from relatives, and IOUs, which are simple acknowledgments of borrowed money without detailed repayment terms or interest rates.
