Sign a loan agreement online

What a loan agreement should say

A loan agreement records that a lender advances money and the borrower repays it on stated terms. Even between family members, writing it down avoids the most common dispute: whether the money was a loan at all, or a gift.

• Amount, currency and date of the advance.
• Interest rate, how it is calculated and whether it is fixed or variable.
• Repayment schedule, with dates and amounts.
• Prepayment: whether the borrower can repay early, and any fee.
• Events of default, such as missed payments or insolvency, and what the lender can do.
• Security and guarantees, if any.
• Governing law.

When extra rules apply

Lending to individuals in the course of a business is usually regulated. In the UK, most consumer loans are regulated credit agreements under the Consumer Credit Act 1974, with required content and pre-contract information; the lender must normally be authorised by the Financial Conduct Authority. Regulated agreements can be made electronically, but the form and content rules still apply. In the US, the Truth in Lending Act requires specific disclosures for consumer credit, and state usury laws cap interest.

Lending between businesses, or a one-off private loan between friends, is generally less regulated. This page is general information, not legal or financial advice. If you lend to consumers, take advice before you send anything.

Guarantees and security

A personal guarantee is a separate promise to pay if the borrower does not. In England and Wales, section 4 of the Statute of Frauds 1677 requires a guarantee to be in writing and signed by the guarantor; in Golden Ocean Group v Salgaocar (2012), the Court of Appeal accepted an electronic signature in emails as enough. Many lenders still take guarantees as deeds, which need a witness.

Security is another layer. A charge over land is registered at HM Land Registry, often through a conveyancer; a charge granted by a UK company must be registered at Companies House within 21 days. In the US, a mortgage or deed of trust is usually notarised and recorded with the county. Sign PDF does not register or notarise anything.

Who signs and in what order

Borrower first, then any guarantor, then the lender. That order means the lender commits only when the borrower and guarantor are bound. Where there are joint borrowers, each should sign so each is liable for the full debt.

Mistakes to avoid

Advancing money before the agreement is signed. Failing to write down the interest rate, which in some places means none can be charged. Asking a guarantor to sign without telling them to take independent advice; in England, after Royal Bank of Scotland v Etridge (No 2), a lender taking a guarantee from someone in a non-commercial relationship with the borrower is expected to take steps to ensure the guarantor understands the risk.

How to send a loan agreement in Sign PDF

Upload the agreement and Sign PDF places blocks for 'Lender', 'Borrower' and 'Guarantor' from the signature page. Ask for 'borrower initials beside the repayment schedule' so there is a clear acknowledgement of the dates and amounts.

Each signer confirms a code from their email before signing, and the certificate records the time, IP address and device. The sealed PDF and its fingerprint mean the repayment schedule cannot be changed later without the PDF reader flagging it. Sign PDF does not move or collect money.