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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 outline specific fund usage (e.g., student or mortgage loans), personal loans are more flexible, allowing the money to be used for various purposes. While often unsecured and not tied to assets, some personal loans may require collateral, which should be detailed in the contract. Essential elements of a personal loan include the names and addresses of both parties, signatures, the state of execution, the contract date, and the total loan amount.
