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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, credit entity, or individual, and the contract is binding. Unlike standard loans, which dictate how funds are used (e.g., student loans, mortgages), personal loans offer flexibility for various purposes and are often unsecured, though some may require collateral. Essential elements of a personal loan agreement include the names and addresses of both parties, signatures, the state of execution, the contract date, and the total loan amount.