Before writing out the contract, you want to collect a few crucial pieces of information. The lender and the borrower should sit down together to decide the amount of money being borrowed, the transaction date, and when (and how) the money will be paid back. You can choose to go for a lump sum payment or you can have several installed payments. These are all details that must be agreed upon before putting everything in writing.
On November 1st, 2013 I, Patrick O’Brien, agreed to provide a loan of $6,000 to John Doe in cash/check/traveler’s check/money order.
John Doe agrees to repay the entire loan of $6,000 by April 1st, 2014. There will be no interest charged to this loan if the loan is fully repaid by April 1st, 2014.
If John Doe fails to repay the entire loan of $6,000 by April 1st, 2014, a monthly interest rate of 10% will be added to the $6,000 until payment is completed.
Patrick O’Brien (Lender), Signature
John Doe (Borrower), Signature