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The Friendly Loan Agreement is designed for use in New Zealand when individuals wish to formalize a lending arrangement while maintaining the informal nature of their relationship. This document is particularly useful for loans between family members, friends, or close associates who want to ensure clear understanding and legal protection while avoiding the complexity of commercial loan documentation. The agreement includes essential terms required by New Zealand law while remaining accessible and easy to understand. It covers loan amount, repayment schedule, interest (if any), default provisions, and basic security measures if required. While termed a "Friendly Loan Agreement," it still maintains legal enforceability under New Zealand's Contract and Commercial Law Act 2017, providing protection for both lender and borrower while preserving their relationship.

1. Parties: Identifies and provides full legal names and addresses of the lender and borrower

2. Background: Briefly explains the context of the loan and the relationship between the parties

3. Definitions: Defines key terms used throughout the agreement

4. Loan Amount and Purpose: Specifies the amount being borrowed and its intended use

5. Repayment Terms: Details the repayment schedule, including payment amounts, frequency, and method

6. Interest: Specifies whether interest applies, and if so, the rate and calculation method

7. Early Repayment: Outlines the borrower's right to repay the loan early and any associated conditions

8. Default: Defines what constitutes a default and the consequences

9. Notices: Specifies how formal communications between parties should be made

10. General Provisions: Contains standard contract clauses including governing law, entire agreement, and amendments