What the AI does when drafting a loan agreement
The assistant asks about the parties' status — individual, sole trader or company — the amount and currency, how the money is transferred, the term and repayment procedure, interest, liability for late payment, the place of performance and the language. It asks up to six related questions per turn. There is no separate «lender» role in the settings: choose «Counterparty» and say in the chat whether you are lending or borrowing. The AI does not confirm that money was received without your data — the transfer stays a field to fill in or is recorded in a separate receipt.
Essential terms of a loan agreement
The amount and currency — in figures and in words — and the method of transfer: cash or bank transfer. The repayment date — a specific date or repayment on demand, and for instalments, a payment schedule. Interest: whether it is charged, the rate, the accrual period and how it is paid. If the loan is interest-free, it is better to say so explicitly. Separately — liability for late payment and early repayment. Requirements for written form and for loans between companies and individuals depend on the country: Legal searches official legal portals for them and keeps a reference only if the source text was retrieved.
Receipt and proof of transfer
The agreement itself does not prove that the money was handed over. For cash, the borrower usually signs a receipt; for a transfer, keep the payment document with the payment reference. You can create a receipt in Legal as a separate document by selecting the loan agreement in the «Basis document» field. The finished draft opens in the editor, where you can sign it and save it as PDF, DOCX or another format.
Limitations
Drafting contracts with legal research is available on the Plus ($5 per month) and Pro ($10 per month) plans. The draft is a working draft for review, not a legal opinion and not a guarantee that the debt can be recovered. Rules on interest, rate caps, currency and loans between companies differ by country; Legal flags the rules it finds, but the current version must be checked separately. This is not financial advice; for a large amount, show the agreement to a lawyer.
Review your own loan agreement in Legal
If you were offered a ready-made loan agreement to sign, upload it to Legal, set the country and choose «Counterparty», explaining your position. The review highlights uncapped penalties, unilateral changes to terms, a missing termination or dispute procedure, and suggests draft amendments.
Review a loan agreement ↗Questions about loan agreements
Can I draft a loan agreement between two individuals?
Yes. State that both parties are individuals and describe the amount, term and interest. ID details can be stored in a party profile — then they are inserted verbatim — or left as fields to fill in.
What is the difference between a loan agreement and a receipt?
The agreement sets out the terms: amount, term, interest, liability. The receipt confirms that the borrower actually received the money. In practice both are often signed; in Legal you can create the receipt separately by selecting the loan agreement as the basis document.
How do I make the loan interest-free?
Say so directly in the chat. The AI adds an explicit interest-free clause instead of staying silent about interest.
Can I add a payment schedule?
Yes. Give the payment dates and amounts and they go into the agreement. If the schedule is not agreed, the AI leaves fields to fill in and does not invent dates.
Which role should I choose if I am the lender?
The role list has no lender or borrower, so choose «Counterparty» and say in your first message whether you are lending or borrowing. The assistant takes your position into account.
Can the AI confirm that the money was transferred?
No. The AI does not confirm receipt of money or performance without your data. The transfer is proven by a receipt or a payment document.
Do I need a paid plan?
Yes, drafting legal documents with legal research is available on Plus and Pro. Free keeps the regular chat, the editor, export and party profiles within quotas.
