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The Informal Loan Agreement is designed for situations where individuals or small businesses in the Philippines need to document a loan transaction without the complexity of formal banking arrangements. This document type is particularly useful for loans between family members, friends, or small business associates, where the parties want to ensure basic legal protection while maintaining simplicity. The agreement complies with Philippine Civil Code requirements and includes provisions for loan amount, interest, repayment terms, and basic protections for both lender and borrower. While informal in nature, it still provides sufficient legal framework to be enforceable under Philippine law, making it suitable for personal loans, small business funding, or short-term financing needs where formal bank loans might not be practical or necessary.

1. Parties: Identifies and provides full details of the Lender and Borrower, including complete names, addresses, and contact information

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

3. Definitions: Defines key terms used in the agreement, keeping technical language to a minimum

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

5. Interest Rate: States the agreed interest rate and calculation method

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

7. Default: Defines what constitutes default and its consequences

8. Representations and Warranties: Basic statements about the borrower's ability to repay and legal capacity to enter the agreement

9. Governing Law: Specifies that Philippine law governs the agreement

10. Signatures: Space for parties to sign and date the agreement