Family Loan Agreement

Loan Agreement for Family Members or Friends

Comprehensible contract for borrowing and lending money. This is a loan agreement between family members or friends. The principle components set out in this template are the principal sum (in Dutch: hoofdsom) and the interest rate (in Dutch: rente). It also includes the agreed monthly payments and possible early payments.

In the event of the borrower failing to repay the loan it also possible to include a penalty clause. This clause, however, can also be deleted from our template. In the model contract it is clearly stated which sections must be filled in and which parts of the agreement are optional.

What to fill in yourself

Please fill in the full name and the address details of both the lender and the borrower. Make agreements about the amount, the repayment period and the interest. You can also read our article (in Dutch): “Wat is een redelijke rente bij lening aan familie of vrienden?“. The Dutch Tax and Customs Administration requires you to charge interest in keeping with market rates. After the agreement has been signed by both parties it is legally effective.

Summary

Contains provisions on:

• Amount;
• Purpose;
• Interest;
• Repayment scheme;
• Duration;
• Loan refinancing;
• Payment;
• Handling fee (optional);
• Penalty (optional).

Our loan agreements include a retroactive effect proviso agreed with the tax authorities (in Dutch: glijclausule). If you decide not to charge a handling fee or a penalty, please delete article 9 and 10.

Context

This document can be used in the following situation:
When you lend or borrow money it is important to use a legally valid loan agreement. This template not only details the amount lent, but also formalizes the term of the loan, the repayment scheme and of course the interest rate.

This loan agreement is often used when lending and borrowing money with family. When lending money to your children it is possible to cancel a portion of the debt each year. Please use our model contract debt relief. When choosing for the fiscal options of a mortgage loan (in Dutch: familiehypotheek) a positive-negative mortgage declaration (in Dutch: positieve-negatieve hypotheekverklaring) must be enclosed as an appendix.

In legal jargo a loan without the interference of a bank is called a private loan. Our website features specific model contracts for loans to employees, between companies or for private limited companies under Dutch law. Please find them all in our complete overview.