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A personal loan agreement is a legal contract between a lender and a borrower for lending money. Lenders can be banks, credit entities, or individuals, and the contract is legally binding. Unlike standard loans, which dictate how funds must be used (e.g., student loans, mortgages), personal loans offer flexibility for various purposes. Personal loans are often unsecured, meaning they are not tied to assets, although some may require collateral. A personal loan contract should include the names and addresses of both parties, their signatures, the execution state, the contract date, and the total loan amount.