A loan agreement should include the full names of the lender and borrower, the exact amount lent, the date the money changes hands, how and when it will be repaid, any interest, what happens if a payment is late, and the signatures of both people. If those pieces are on paper, most everyday loans are already far better documented than average.
Most disputes over private loans do not start with dishonesty. They start with fuzzy memories: was it 20,000 or 25,000, was repayment due monthly or whenever possible, did that transfer in March count toward the loan or was it a gift? A short written agreement answers these questions before anyone has to argue about them, which is exactly why it protects the relationship as much as the money.
The people and the amount
Start with who is involved. Write the full legal name of each person exactly as it appears on their ID card or passport, plus an ID number, address, and phone number. Nicknames feel natural between friends, but an agreement between Nok and Bee is much harder to rely on than one between two people whose full names and ID numbers are recorded. If either party is lending or borrowing on behalf of a business, name the business and the person signing for it.
Then state the amount clearly, in both numbers and words, with the currency named. Writing the amount twice, for example 30,000 baht (thirty thousand baht), catches typing mistakes and makes the figure harder to misread or alter later. If the loan will be paid out in parts, say so and list each part.
- Full legal names of lender and borrower, as shown on ID
- ID or passport numbers
- Current addresses and phone numbers
- The loan amount in numbers and words, with the currency
- Whether the money is paid out all at once or in stages
How and when the money is handed over
Record the date the money is actually given and the method used, such as a bank transfer, PromptPay, an e-wallet, or cash. This matters because a signed agreement proves what was promised, while a transfer record proves the money really moved. Together they are much stronger than either one alone.
If the loan is paid in cash, add one line saying the borrower confirms receiving the full amount on that date, and consider having the borrower sign a short receipt at the moment of handover. Cash leaves no automatic trail, so the agreement has to do more of the work.
The repayment plan
This is the section people skip most often, and the one that prevents the most arguments. Say exactly how repayment works: the amount of each payment, the due date, the number of payments, and the account or method the borrower should pay into. A plan like 2,500 baht on the 5th of every month for 12 months, paid to the lender's Kasikorn account, leaves nothing to interpret.
Avoid open-ended phrases like pay back when you can. They feel kind at signing time, but they make the loan almost impossible to follow up on, because no payment is ever technically late. If flexibility matters, build it in explicitly, for example by allowing the borrower to skip one month per year with advance notice.
- Amount of each payment
- Due date for each payment
- Total number of payments and the final payment date
- Payment method and the exact account to pay into
- Whether early repayment is allowed, and on what terms
Interest, or a clear statement that there is none
If interest is charged, state the rate, whether it is per month or per year, and how it is calculated, ideally with the total repayment amount written out so both sides see the same final number. Many countries put legal caps on interest for private loans, and charging above the cap can make the interest, and sometimes more, unenforceable. Check what applies where you live before setting a rate.
If the loan is interest-free, do not just leave the interest section out. Write one sentence saying no interest is charged. Silence invites a later claim that interest was agreed verbally, while an explicit zero closes the question.
What happens if a payment is late
Decide in advance how late payments are handled, while everyone is still on good terms. Common choices are a short grace period of a few days, a reminder process, and a consequence for repeated non-payment, such as the remaining balance becoming due. Rules about late fees and penalty interest vary a great deal between countries, so keep any fee modest and check local limits rather than copying a number from the internet.
The point of this section is not to be harsh. It is to make the follow-up conversation easier. When the agreement itself says a reminder is sent after seven days, sending that reminder is just following the document, not a personal accusation.
Signatures, dates, and copies
Both the lender and the borrower should sign and date the agreement, and each should keep a complete copy, whether that is a paper original or a final PDF. An unsigned draft on someone's phone is a conversation; a signed copy in both people's hands is a record. If you sign electronically, use a clear method and confirm receipt in writing.
Witnesses are usually optional for a private loan, but for larger amounts an independent adult witness who signs with their name and ID details adds useful proof that both people signed willingly. In some countries, written evidence signed by the borrower is what makes a larger loan enforceable in court at all, so treat the signature block as the part you never rush.
Checklist
- Full names, ID numbers, and contact details of both parties
- Loan amount written in numbers and words, with currency
- Date and method the money is handed over
- Repayment amount, due dates, and number of payments
- The account or method repayments should be sent to
- Interest rate and calculation, or a statement that the loan is interest-free
- Grace period and what happens after a late or missed payment
- Whether early repayment is allowed
- Signatures and dates for both parties, plus witnesses if used
- A complete signed copy kept by each side
Common mistakes
- Recording only nicknames instead of full legal names and ID details.
- Writing the amount once, in numbers only, where a typo or alteration can go unnoticed.
- Using vague repayment wording like pay back when you can, which makes no payment ever late.
- Leaving interest unmentioned instead of stating a rate or an explicit zero.
- Handing over cash with no receipt or transfer record to prove the money moved.
- Signing one copy that only the lender keeps, leaving the borrower nothing to check against.
- Changing the deal verbally later without writing down the new terms.
Frequently asked questions
Does a loan agreement have to be long to be valid?
No. A single page covering the parties, amount, handover date, repayment plan, interest, late payment terms, and signatures does the job for most private loans. Length adds nothing by itself; clarity and completeness are what matter.
Can I write a loan agreement myself without a lawyer?
For a straightforward personal loan, yes, and a self-written agreement is far better than nothing. Consider professional advice when the amount is large relative to what you could afford to lose, when property or a guarantor is involved, or when the borrower is a business.
Is a handwritten loan agreement acceptable?
Generally yes. What matters is that the terms are legible, complete, and signed by both parties, not whether it was typed. A typed document is simply easier to read, copy, and store, and harder to alter without it showing.
What if we already exchanged the money without an agreement?
Write one now. A signed document made after the fact, often called a debt acknowledgment, records the amount owed and the repayment plan and is far better than relying on memory. Attach or reference the original transfer record if you have one.
Should the agreement mention what the loan is for?
It is optional but often helpful. A line like this loan is for motorbike repairs adds context that makes the document more credible and makes it harder to later recharacterize the money as a gift or a business investment.
Do both parties really need to keep a copy?
Yes. Each side should hold a complete signed copy, paper or PDF. If only one person holds the document, the other has no way to verify terms later, and a lost or damaged single copy can leave both sides with nothing.
What is the single most important thing to include?
If you could keep only three items, keep the amount, the repayment plan with dates, and both signatures. In practice, missing repayment dates cause the most day-to-day friction, and a missing signature causes the most serious evidence problems.
Sources
- Thailand Civil and Commercial Code — loan provisions
This guide is general information, not legal advice. Legal requirements vary by jurisdiction, transaction type, and individual circumstances.