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The Private Loan Agreement is essential for documenting private lending arrangements in New Zealand, whether between individuals, businesses, or a combination thereof. This document is typically used when traditional bank financing is not preferred or available, or when parties wish to establish a direct lending relationship. The agreement must comply with New Zealand's regulatory framework, particularly the Credit Contracts and Consumer Finance Act 2003, Fair Trading Act 1986, and related legislation. It includes comprehensive terms covering loan amount, interest calculations, repayment schedules, security arrangements (if any), default provisions, and appropriate consumer protection measures. The document serves to protect both lender and borrower interests while ensuring transparency and legal enforceability of the lending arrangement.

1. Parties: Identifies and provides full details of the lender and borrower

2. Background: Explains the context of the loan and the parties' intention to enter into the agreement

3. Definitions: Defines key terms used throughout the agreement

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

5. Interest Rate: Details the applicable interest rate, calculation method, and any variation mechanisms

6. Repayment Terms: Specifies repayment schedule, installment amounts, and payment methods

7. Default and Consequences: Defines events of default and their consequences, including default interest rates

8. Representations and Warranties: Statements of fact and assurances given by the borrower

9. Borrower's Obligations: Lists ongoing obligations of the borrower during the loan term

10. Early Repayment: Terms and conditions for early loan repayment, including any penalties

11. Costs and Expenses: Allocation of costs related to the agreement and enforcement

12. Notices: How formal communications between parties should be made

13. General Provisions: Standard contract clauses including governing law, assignment, and amendments