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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 credit entity, or an individual, and the contract is legally binding. Unlike standard loans, which specify how funds must be spent (e.g., student loans or mortgages), personal loans offer more flexibility in their use. They are typically unsecured, meaning they aren't tied to assets, but some might require collateral, which should be detailed in the agreement. Essential elements of a personal loan contract include the names, addresses, and signatures of both parties, the state of execution, the contract date, and the total loan amount.
