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Loan Acknowledgement Receipt Template for India

A Loan Acknowledgement Receipt is a formal document under Indian law that serves as official evidence of a loan transaction between two parties. This document captures essential details including the loan amount, payment terms, interest rates, and the identities of the lender and borrower. Governed by the Indian Contract Act, 1872, and various state-specific money lending regulations, it provides legal protection to both parties and can be used as evidence in court proceedings. The document includes mandatory elements such as party details, loan terms, and witness signatures, while also accommodating optional components like security details and guarantor information depending on the nature of the loan.

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What is a Loan Acknowledgement Receipt?

The Loan Acknowledgement Receipt is a fundamental document in Indian lending practices, used to formally document the transfer of loan funds from a lender to a borrower. This document is essential in both institutional and private lending scenarios, providing crucial evidence of the loan transaction and its terms. It complies with the Indian Contract Act, 1872, and relevant state money lending laws, serving as a legally admissible record of the debt. The receipt typically includes the loan amount, interest rate, repayment terms, and party details, making it valuable for record-keeping, legal compliance, and potential dispute resolution. It's particularly important in contexts where formal loan agreements might not be practical or necessary, such as in small-scale lending or emergency loans.

What sections should be included in a Loan Acknowledgement Receipt?

1. Date and Place: The date and location where the receipt is executed

2. Parties Details: Full names, addresses, and identification details of the lender and borrower

3. Loan Amount: The principal amount of the loan in both figures and words

4. Acknowledgment Statement: Clear statement acknowledging receipt of the loan amount

5. Purpose of Loan: Brief description of the intended use of the loan amount

6. Repayment Terms: Details of how and when the loan will be repaid

7. Interest Rate: Applicable interest rate and calculation method

8. Signatures: Signatures of both parties and witnesses with dates

What sections are optional to include in a Loan Acknowledgement Receipt?

1. Security Details: Details of any collateral or security provided for the loan

2. Guarantor Information: Details and signature of guarantor if applicable

3. Default Terms: Consequences of default in repayment

4. Mode of Disbursement: Details of how the loan amount was transferred (cash/bank transfer/check)

5. Prepayment Terms: Terms and conditions for early repayment of the loan

6. Dispute Resolution: Method of resolving any disputes regarding the loan

What schedules should be included in a Loan Acknowledgement Receipt?

1. Repayment Schedule: Detailed schedule of repayment installments with dates and amounts

2. Disbursement Schedule: Schedule of multiple loan disbursements if the loan is to be released in tranches

3. Security Details Annexure: Detailed description of security/collateral including photographs or documents

4. Bank Account Details: Bank account details of parties for loan disbursement and repayment

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

India

Cost

Free to use

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