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A personal loan agreement is a legal contract between a lender and a borrower for lending money, which can come from a bank, credit entity, or individual. This contract is legally binding and differs from standard loans, as it allows for more flexibility in the use of funds. Standard loans, like student loans or mortgages, specify how the money must be spent, while personal loans can be used for various purposes and are often unsecured, though some may require collateral. The agreement must include essential details such as the names and addresses of both parties, signatures, state of execution, date of the contract, and the total loan amount.
