Drafting Loan Agreement Tips

Summary

Verbal loan agreements can be legally binding in Michigan if they meet certain criteria. Drafting a written agreement is still possible, but both parties must agree on back pay and new terms. Online services like LegalZoom and Rocket Lawyer can help create custom agreements. Small claims court in Michigan handles disputes under $6,000.

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Questions about a personal loan agreement
Hello Brooke, I'd be happy to help. Could you please specify what exactly you're uncertain about in your personal loan agreement?
Made a verbal loan agreement back in July *. Loaned someone $*,*. They have made one payment of $* in October *. I have texts from them in December * of them saying they could up the payment to pay it off quicker, but still haven't received anything. I am wondering if it is too late to type up a loan agreement stating I want back pay for months missed and also if I don't receieve payments going forward, I will be taking it to small claims court.
Hello Brooke,
*. It's not too late to draft a written loan agreement.
*. However, the back pay for missed months would need to be agreed upon by both parties.
*. You can include a clause about taking the matter to small claims court if payments aren't made.
*. Keep in mind, verbal contracts can be legally binding in Michigan, given they meet certain criteria.
How can I create a loan agreement? Is there a template? Can I mention in there that I want backpay and that I was * a month going forward instead of * and if she doesn't want to agree and sign, it will then be taken to small claims?
Creating a loan agreement involves the following:
- Clearly identifying the parties to the loan
- The loan amount and the interest rate (if any)
- The repayment schedule and amount
- Any additional terms or conditions
There are templates available online. You can add a clause about backpay and increased payments, but both parties need to agree. If the borrower doesn't agree and sign, you can take the matter to small claims court. Keep in mind the small claims court in Michigan has a limit of $*,*.
the loan is only $*,*
Since the loan amount is under the $*,* limit, you can indeed take this matter to a small claims court in Michigan if the borrower doesn't agree and sign the new loan agreement.
Ive checked out a few templates online and I didn't really see where I could add all the stuff I wanted. Is there somewhere I can go online and pay someone to type everything up?
Yes, there are online services like LegalZoom, Rocket Lawyer, and UpCounsel where you can hire an attorney to draft a custom loan agreement for you. Please ensure to provide them all necessary details to avoid any issues.
Thank you so much
You're welcome, Brooke! If you have any more questions or need further clarification, feel free to ask. Best of luck with your loan agreement.
Oh, wait I have one more question
Sure, Brooke, I'm here to help. Please go ahead and ask your question.
Since the loan was verbally agreed months ago and I am just typing the loan agreement.. Is it ok to put the date July 21st - when the loan verbally was set?
You can include the original date of the verbal agreement in the written contract, but it should be clear that this is the date of the original verbal agreement, not the date of the written contract. The written contract should have its own date to ensure clarity.
Ok great, thanks so much
You're welcome, Brooke! Don't hesitate to reach out if you have more questions in the future. Good luck with your situation!