Parent Child Loan Agreement Template

As a parent, it`s natural to want to help your child achieve financial stability. However, lending money to family members can be a tricky business. To avoid any miscommunication or misunderstandings, it`s important to have a clear and concise parent-child loan agreement in place. In this article, we`ll discuss what a parent-child loan agreement is and provide you with a template to help you get started.

What is a Parent-Child Loan Agreement?

A parent-child loan agreement is a legal document that outlines the terms of a loan between a parent and their child. This agreement ensures that both parties understand the terms of the loan, including the repayment schedule, interest rate, and any penalties for late payments. It also serves as proof of the loan in case of any disputes in the future.

Why is a Parent-Child Loan Agreement Important?

A parent-child loan agreement is important for several reasons. First, it helps to ensure that both parties are on the same page when it comes to the loan agreement. This can help to avoid misunderstandings or miscommunications down the road. Second, it provides a level of protection for both parties by outlining the terms of the loan in writing. Finally, it can provide peace of mind for both parties, knowing that the loan agreement is clear and legally binding.

Parent-Child Loan Agreement Template

To help you get started with your parent-child loan agreement, we`ve provided a template below. This template can be customized to meet your specific needs and can be modified as needed.

Loan Amount: [Insert loan amount]

Interest Rate: [Insert interest rate]

Repayment Schedule: [Insert repayment schedule]

Penalties for Late Payments: [Insert penalties for late payments]

Collateral: [Insert collateral, if any]

Date of Agreement: [Insert date]

Agreement Terms

1. Loan Amount: The borrower agrees to borrow the loan amount specified above from the lender.

2. Interest Rate: The borrower agrees to pay an interest rate of [Insert interest rate] on the outstanding balance of the loan.

3. Repayment Schedule: The borrower agrees to repay the loan in accordance with the repayment schedule specified above.

4. Penalties for Late Payments: The borrower acknowledges that late payments may incur penalties, as specified above.

5. Collateral: The borrower agrees to provide the lender with collateral in the form of [Insert collateral, if any].

6. Termination of Agreement: This agreement may be terminated by either party upon [Insert termination clause].

7. Governing Law: This agreement will be governed by the laws of [Insert governing law].

8. Entire Agreement: This agreement constitutes the entire agreement between the parties and supersedes all prior understandings or agreements.


A parent-child loan agreement can help to ensure that both parties are on the same page when it comes to a loan agreement. By outlining the terms of the loan in writing, it can help to avoid misunderstandings or miscommunications down the road. If you`re considering lending money to your child, be sure to have a clear and concise loan agreement in place to protect both yourself and your child.