26 Nov 2019 / Back to latest updates

Loan Agreements – Useful Tips and Advice on documents and information you need to consider when entering an agreement


We at the Debt Collection Centre and Devonshires Solicitors receive a number of enquiries from clients regarding agreements for lending monies. This a brief summary with some useful tips what documents and things you should consider when lending money to someone else (be it a family member, partner or a business to business).

Should you need specific advice we would direct you to a solicitor or the Citizens Advice Bureau for further information.

Tips and Advice

  • Make sure there is a copy of the agreement in writing (even if it is an informal loan to a friend or family member); even an email or various WhatsApp messages. It is better to have a written record to refer to a later stage if you need to;
  • The agreement should include the amount that has been lent, the names and addresses to the agreement;
  • Keep a copy of the agreement or any email or WhatsApp messages;
  • If you lend further monies to the borrower keep a record of the amounts, dates and payment dates;
  • Make sure your agreement includes a payment date for the borrower to pay back the money;
  • Discuss with the borrower what should happen if monies are not paid on time or if there is any future disagreement that may occur between the parties. Can the borrower admit to being liable for the debt and any future legal costs? Does any of the unpaid principal amount of the loan become payable immediately if not paid by the payment date;
  • Include a term for interest to be added to any unpaid amount and agree how to calculate interest. This ensures that you are not penalised if the loan is not paid on time;
  • Discuss with the borrower whether the borrower can provide you with security if the loan is unpaid either over the borrower’s land or shares it may have in a company;
  • If the loan mentions that the loan is ‘secured’ then ensure the security is registered with Companies House or the Land Registry (depending on what property the loan is secured against) and take legal advice to ensure the correct formalities are met.


Keep a detailed record of the agreement and terms and any changes to the terms to protect you and your money at a later stage if there is any disagreement. If you need advice or if any of the terms cause you confusion then speak to a firm of solicitors.

If you have any unpaid monies that have not been paid by a borrower then please contact us at The Debt Collection Centre and Devonshires Solicitors for further information and advice on our debt recovery services.  

The Debt Collection Centre


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