A loan agreement is a legal document that outlines the terms and conditions of a loan between a borrower and a lender. The purpose of a loan agreement is to define the expectations and responsibilities of both parties in the transaction.

The loan agreement typically includes details such as the loan amount, repayment terms, interest rate, and any penalties for late payments or default. It may also include provisions for collateral or guarantees, as well as conditions for early repayment or renegotiation.

Loan agreements can be used for a wide range of purposes, from personal loans between friends or family members to large-scale commercial loans for businesses. They provide a clear and legally binding agreement that protects both parties and helps ensure the loan is repaid as agreed.

It is important to have a clear understanding of the terms and conditions of a loan agreement before entering into the transaction. Borrowers should carefully review the agreement and seek advice from a financial advisor or attorney if necessary.

In summary, a loan agreement is a document that establishes the terms and conditions of a loan between a borrower and a lender. By outlining the expectations and responsibilities of both parties, it helps ensure that the loan is repaid as agreed and protects the interests of everyone involved.