Loan agreement template South Africa: lending to friends, family or a business
6 min read · General information, not legal advice
Quick answer
A South African loan agreement records who lends what to whom, when it must be repaid, any interest, and what happens if payments stop. Loans between family or friends who don't lend money for a living are usually not at arm's length, so the National Credit Act generally doesn't apply. Commercial lending to consumers usually does, and needs NCR registration.
What to include
1) Names, ID or registration numbers of lender and borrower. 2) The loan amount and how it is paid out. 3) The repayment schedule: lump sum or instalments, with dates. 4) Interest rate, if any, and how it's calculated. 5) Early repayment rights. 6) What counts as default and what happens then (acceleration, collection costs). 7) Any security or surety. 8) Domicilium addresses, signatures and dates.
The National Credit Act
The NCA covers credit agreements between parties dealing at arm's length. Family loans and many shareholder loans fall outside it. If it does apply, lenders may need to register with the National Credit Regulator, do affordability checks and stay under the legal caps on interest and fees. If you're unsure, speak to an attorney before lending.
Interest-free family loans
Interest-free loans are common and lawful. Note that SARS may treat a large interest-free loan to a trust or connected person as a donation for tax purposes, so check with a tax practitioner for big amounts.
Security and sureties
For larger loans, ask for security: a suretyship from a third person (which must be in writing and signed), or a pledge of an asset. Without security, the lender is an unsecured creditor if things go wrong.
Free to fill in
Loan Agreement
Fill it in online free, preview it as you go, then download Word + PDF from R199.
Frequently asked questions
Is a handwritten loan agreement valid in South Africa?
Yes, a handwritten loan agreement signed by both parties is valid. A clear typed template just reduces arguments about what was agreed.
Does the National Credit Act apply to loans between family?
Usually not, because family members generally don't deal at arm's length. It does apply to most commercial lending to consumers.
How long does a lender have to claim an unpaid loan?
Most loan debts prescribe after 3 years from when repayment was due. A signed acknowledgement of debt restarts that clock.
Can I charge interest on a personal loan?
Yes, at an agreed rate. If the NCA applies, interest is capped and the lender may need to be registered.
Should the loan agreement be witnessed?
Witnesses aren't required by law, but they help prove the agreement if the borrower later disputes it.
