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Loan agreement between family or friends (England and Wales)
England and Wales · in English
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13 questions · about 5 min
Made for use in England and Wales
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For two private individuals — relatives, friends, a couple — lending money to each other, with or without interest. The agreement records the amount and when it was paid over, the interest if any, the final repayment date or monthly instalments, and what happens if a payment is missed. A loan between private people, not made in the course of a business, needs no FCA authorisation, falls outside most of the Consumer Credit Act 1974 and needs no registration or stamp duty. Both sign it, and each keeps a signed copy.
- Made for use in England and Wales
- Last updated October 28, 2026
- Document in English
Where a UK document reproduces the words of legislation or of a government publication — UK, Scottish or Northern Irish — it contains public sector information licensed under the Open Government Licence v3.0.
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When to use this document
- You are lending money to a relative in England and want everything written down.
- A friend is lending you money for a car and you both want a clear repayment plan.
- Your parents are helping with a deposit and want it treated as a loan, not a gift.
- You want a loan agreement with or without interest between private people in England or Wales.
What you fill in
The details the document asks for.
- Date
- Lender
- Lender's address
- Town or city
- Borrower
- Borrower's address
- Amount
- Date of payment
- Annual interest rate (0% if the loan is interest-free)
- Repayment date
- Lender's bank account
- Amount of each monthly instalment
- Day of payment
Common questions
- Does a loan to a friend or relative need to be in writing in England and Wales?
- No, a loan can be made by word of mouth, but a signed agreement is the best evidence of what was lent, that it was a loan and not a gift, and when it is due. Without one, a court has to decide from messages, bank transfers and memory. The lender has six years from when repayment fell due to sue for it (Limitation Act 1980, section 5).
- Is there tax or registration on a private loan between individuals?
- There is no stamp duty or registration for a private loan agreement. Interest the lender receives is the lender's taxable income, which may be covered by the personal savings allowance or need reporting to HMRC. If a loan to a family member is later written off, it can count as a gift for inheritance tax.
- What can the lender do if the borrower stops paying?
- Under clause 5, the lender can give written notice that the whole balance is due. If it is still not paid, the next step is a letter before claim giving 14 days to reply, then a claim in the County Court through Money Claim Online. Small claims mediation is free once a claim is defended.
How you can sign this document
- Print it and sign by hand. The signature lines in the document are left blank on purpose — sign on them in ink.
- Sign it yourself with a qualified electronic signature. If you already hold a QES — Evrotrust, B-Trust, StampIT, ZealiD or any qualified provider on the EU Trusted List, on a card, a USB token, in a mobile app or in the cloud — our signing guide explains step by step how to sign this exact file without invalidating it. Step-by-step help, and a way to check it worked
DocMuse sells documents, not legal advice. Acceptance always depends on the recipient's rules and your local law.
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