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The Friendly Loan Agreement is designed for situations where individuals wish to formalize a loan arrangement while maintaining the personal nature of their relationship. This document type is particularly relevant in Germany, where it must comply with the German Civil Code (BGB) requirements while being accessible to parties without legal expertise. It includes essential elements such as loan amount, repayment terms, and any interest provisions, while typically featuring more flexible terms than commercial loans. The agreement is commonly used for personal loans between family members, friends, or acquaintances, and can be adapted for various purposes such as education funding, property purchases, or business startups. While maintaining its friendly character, the document provides legal certainty and clear documentation of the arrangement, helping prevent misunderstandings and protecting both parties' interests.

1. Parties: Identification and details of the lender and borrower, including full names, addresses, and any other relevant contact information

2. Background: Brief context of the friendly loan arrangement and the relationship between the parties

3. Definitions: Key terms used in the agreement, keeping technical language minimal but ensuring clarity

4. Loan Amount and Purpose: Specification of the loan amount and intended use of the funds

5. Interest Rate: Clear statement of interest rate (if any) and calculation method

6. Repayment Terms: Details of how and when the loan will be repaid, including payment schedule

7. Method of Payment: Specified payment methods and bank account details for transfers

8. Default Provisions: Simple terms describing what constitutes default and consequences, keeping language friendly but clear

9. Representations: Basic confirmations from both parties about their capacity to enter into the agreement

10. Governing Law: Confirmation that German law governs the agreement

11. Signatures: Execution block for both parties with date and place of signing