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Is this a private loan between two individuals? Ie. it does not involve a company/body who provides a form of agreement.
How much is the loan for?
If your primary concern is that this obligation to repay is legally enforceable (ie. that you will be able to sue and recover the money in the event of default) then you can simply prepare a simple letter from the person to whom you are lending the money. It should state their name, address, give details of loan (date of loan, amount, date to be repaid) and that you intend to create legal relations in making the loan.
Get him to sign it with a witness also signing, printing their name, address and occupation.
This will be sufficient for you to produce as evidence to sue in the small claims Court.
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Yes, the witnesses should ideally be persons who are not family members really - it's not essential but best practice.
I don't have access to any such letters right now, but they really are very simplt. They identify both parties, the loan itself (ie the amount and when it was transferred - do it at the same time as him signing the letter- simultaneous exchange and signature)), when it is to be repaid. The letter should contain a statement "In common with [INSERT LENDER'S NAME] I agree to give legal effect to the terms mentioned in this letter and acknowledge [INSERT LENDER'S NAMED] right to recover sums owing under this agreement in the event of default and, if necessary, at Court"
I hope this clarifies, if so please kindly click accept.
If all you wish to have is evidence that this is a simple loan arrangement of a sum of money loaned which is to be repaid by a certain date with no other terms then the letter will suffice as an acknowledgemnet of this and will allow you to sue the debtor if he defaults.
Make sure the letter is signed either before or at completion of the transfer of money to him.
I trust this answers your questions, if so please click accept.
Thanks for your accept.
I think the drafting of the letter is probably a separate question. If you are happy to click a further accept if I post a draft form of the letter in reply (JA forbids the transfer of attachments) then I shall draft.
[their name] (shift to left hand side of page obviously)
Dear [your full name]
LOAN OF £900.00
I write to confirm I have today received the sum of £900.00 (the "Loan Amount") by [insert transfer of money type]. I acknowledge this is not a gift, but a repayable loan to you.
As agreed, this sum has been transferred to me as a loan which is to be repaid in full no later than 15th September 2010.
In the event of my default I acknowledge that any money repaid to you after 15th September 2010 which is less than the Loan Amount shall not settle the debt and that the balance of any monies owing shall continue to be repayable to you until you have given me written notice that a sum equal to the Loan Amount has been received and no further monies under the terms of loan are owed by me to you.
As further agreed with you, I agree and acknowledge that legal effect is to be given to the above terms of the loan and appreciate your legal right to recover the Loan Amount including issuing a claim at Court to recover the Loan amount and any costs you incur as a result my default.
INSERT DEBTORS NAME
Witness Signature ....................
Witness Name ....................
Witness Address ....................
Witness Occupation ....................
If you are satisfied with the letter I shall be grateful if you would kindly click accept.
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