Personal loan agreement template

Personal Loan Agreement (Interest-Free)

Contract no.: Contract number

Date: Contract date

Place: City of signing

Parties

First Party (Lender): First party name, national ID / iqama no. First party ID, national address: First party address, e-mail: First party e-mail, mobile: First party mobile.

Second Party (Borrower): Second party name, national ID / iqama no. Second party ID, national address: Second party address, e-mail: Second party e-mail, mobile: Second party mobile.

Article 1: Recitals and definitions

1.1 Whereas the Lender wishes to give the Borrower an interest-free loan with no increase, the parties agree as follows.

1.2 The recitals and schedules form an integral part of this Contract and are read with it. In a conflict, this Contract prevails, then the schedules in numerical order.

1.3 "Business Day" means any day other than Friday, Saturday and an official holiday in the Kingdom of Saudi Arabia. "Laws" means the laws and regulations in force in the Kingdom.

1.4 This Contract follows Islamic Sharia and the Civil Transactions Law, and contains no interest or stipulated increase on a debt. Any term to the contrary is void, without voiding the Contract unless it was the reason for it.

1.5 Each party confirms that it has legal capacity to contract, that its signatory is authorised, and that entering into this Contract breaches no other obligation binding on it.

Article 2: Amount and purpose

2.1 Loan amount: SAR Loan amount (in words: Value in words), handed to the Borrower on Delivery date by: Loan delivery method, and the Borrower confirms receipt.

2.2 Purpose: Loan purpose. The Borrower repays only the same amount, with no increase, fee or stipulated benefit. What it freely gives after repayment, without condition or custom, is outside this.

2.3 The debt is written and witnessed by two witnesses, and may be documented by a promissory note on Nafith or through the competent authority, to be an enforceable instrument where its conditions are met.

Article 3: Repayment schedule

| Instalment | Amount | Due date |

| --- | --- | --- |

| First | First instalment | First instalment date |

| Second | Second instalment | Second instalment date |

| Last | Last instalment | Last instalment date |

3.1 Payment is by transfer to IBAN IBAN, account name Account holder, bank Bank name, or in any way that proves it. The creditor gives a receipt, and each payment is applied to the item the parties have assigned it to.

3.2 The Borrower may repay early at any time without a fee. An instalment may be deferred by written agreement with no increase.

3.3 If two consecutive instalments are late after 30 days' notice, the Lender may claim the rest at once, unless insolvency is proved. No financial penalty applies to lateness.

Article 4: Security

4.1 Security: None / guarantor / pledge / promissory note. Any guarantor's name: Guarantor name, ID: Guarantor ID, who signs this Contract or a separate guarantee.

4.2 The Lender takes no benefit from any pledge or security, and does not become owner automatically on default; any sale is through the competent authority, with any surplus returned to the Borrower.

Article 5: Representations, death and insolvency

5.1 Each party confirms that it has capacity, the money is lawful, the loan is no cover for riba or money laundering, and the details are true. The Borrower tells the Lender of any change of address.

5.2 If the debtor dies, the debt attaches to the estate under Sharia rules. If it is insolvent, it is given time as the competent authority decides, and the creditor may freely release all or part.

5.3 The Borrower is released to the extent it pays. The Lender gives a final release within 7 days of full repayment, returns or cancels any note, and frees any pledge.

Article 6: Representations and warranties

6.1 The Lender and the Borrower each confirm the following at signing, and shall tell the other at once if any of it changes:

• the details and documents it has provided are true and complete on everything affecting the other's decision, and it has hidden nothing it knows to be material.

• no claim, seizure, disposal ban, bankruptcy or legal bar prevents performance of this Contract.

• the source of funds and purpose of contracting are lawful, and this Contract is no cover for any prohibited dealing.

• it holds the licences, approvals and legal capacity needed to sign and perform this Contract, and will keep them valid throughout.

6.2 An untrue material statement is a breach of this Contract, subject to its terms and the Civil Transactions Law; deliberately misleading information is deceit that allows annulment and compensation to be sought.

Article 7: Breach and its effects

7.1 A breach notice is in writing, states the obligation breached, what is needed to cure it and a reasonable time of at least 15 days, unless this Contract sets another period. No notice is needed if cure is impossible or the party at fault has said it will not perform.

7.2 Each party may withhold its corresponding obligation that has fallen due if the other has not performed its own, unless that would run against good faith or the failure is minor, under the Civil Transactions Law.

7.3 The injured party shall make reasonable efforts to limit its loss and is not compensated for what it could have avoided. Compensation follows proved loss. Nothing is charged as compensation or increase merely for lateness in paying a sum of money, and the actual costs awarded by the competent authority may be claimed.

7.4 On termination the parties are restored as far as possible, each answering for what it actually benefited from. This Contract does not affect statutory limitation periods or the terms that survive its end by their nature.

Article 8: Documents, correspondence and proof

8.1 Each party keeps a copy of this Contract, its schedules, payment receipts and handover reports for at least 5 years after it ends, or any longer statutory period.

8.2 Correspondence through the e-mail or mobile at the head of this Contract, and approved government platforms, is proof where it can be attributed to its sender, under the Electronic Transactions Law and the Evidence Law. Nothing said orally changes this Contract.

8.3 The party receiving money gives a receipt for each sum, stating what it covers. No payment is a final release unless that is stated in writing.

Article 9: Successors and third parties

9.1 This Contract binds the parties and their lawful successors, within the limits of any estate, unless a party's person was central to contracting. On death, the heirs or their representative shall tell the other party within a reasonable time, and rights are settled under Sharia and the Laws.

9.2 This Contract creates no right for anyone other than the parties unless stated. A party's dealing with what is its own does not affect the other's rights here, and nothing can be raised against a third party in good faith who did not know of it until it is documented or registered where that is required.

Article 10: Confidentiality

10.1 Each party shall keep the other's non-public information confidential, use it only to perform this Contract, and disclose it only to staff and advisers who need it and are bound by confidentiality.

10.2 This excludes information that is public through no fault of the recipient, or that a competent authority lawfully requires, provided the other party is told where possible. The duty lasts 3 years after the Contract ends, and information is returned or destroyed on request.

Article 11: Force majeure and exceptional circumstances

11.1 A party is not liable for delay or failure caused by an event beyond its control that was unforeseeable and unavoidable, provided it notifies the other within 7 days and makes reasonable efforts to limit the effect. Force majeure does not excuse paying what fell due before it occurred.

11.2 Affected obligations are suspended for the duration. If the event lasts more than 60 days, either party may terminate by written notice, with payment for work actually performed.

11.3 If unforeseeable general exceptional circumstances make performance so onerous as to threaten a heavy loss, the affected party may request renegotiation without delay while continuing to perform, as provided by the Civil Transactions Law.

Article 12: General provisions

12.1 Notices are in writing and sent to the addresses at the head of this Contract; the registered e-mail is valid, and a notice counts as received on the next Business Day. Each party shall report any change of address.

12.2 Neither party may assign this Contract or subcontract without the other's prior written approval, and it remains responsible for its subcontractors.

12.3 Delay in using a right does not waive it, and this Contract changes only by a signed written annex. If a provision is void the rest stays in force, unless that provision was the reason for contracting.

12.4 The parties shall comply with the rules against bribery, corruption and money laundering. Neither is the agent, partner or employer of the other, and each bears the obligations of its own staff.

12.5 This Contract may be signed electronically under the Electronic Transactions Law, and electronic signatures and records have their legal force. It is made in two copies, one for each party.

Article 13: Governing law and disputes

13.1 This Contract is governed by the laws of the Kingdom of Saudi Arabia, including the Civil Transactions Law, and in a manner consistent with Islamic Sharia.

13.2 The parties shall try to settle any dispute amicably through their representatives within 30 days of notice, and may then use conciliation through the Taradhi platform.

13.3 If it remains unresolved, it shall be decided by: Forum: the competent courts in the city of ... / arbitration under the rules of the Saudi Center for Commercial Arbitration, seated in .... The parties shall keep performing whatever the dispute does not affect.

13.4 Where made in Arabic and English, the Arabic text prevails in any difference.

Schedules

• Schedule 1: copies of IDs and proof that the loan amount was handed over.

Signatures

The parties sign this Contract after reading and accepting all of its terms.

| First Party (Lender) | Second Party (Borrower) |

| --- | --- |

| Name: First party name | Name: Second party name |

| Signature: First party signature | Signature: Second party signature |

| Date: Signing date | Date: Signing date |

| First witness | Second witness |

| --- | --- |

| Name: First witness name | Name: Second witness name |

| ID: First witness ID | ID: Second witness ID |

| Signature: First witness signature | Signature: Second witness signature |