Sample Contract to Pay Back Money

Below is a sample contract to pay back money. Before forking over money to a friend, relative, acquaintance, coworker, or family member, it is imperative that the two parties sign a payment agreement that clearly stipulates the date of transaction, the date of repayment, the amount of money that needs to be paid back, and any further stipulations in case the borrower is late or unable to make the payment(s). The key to a solid personal loan agreement is that it contains all the important necessary details without being overly verbose.

Also keep in mind that you should always be wary of lending or borrowing money from a friend or family member. Any dispute in the repayment can cause deep frictions in your relationship with the other person. When a friend or family member asks me to borrow some money, I either refuse or provide an amount that I know will not drastically impact me if I fail to get it back. These are all things you need to keep in mind before constructing a contract to pay back money.

Sample Repayment Contract – Lump Sum

Before writing out the contract, you want to collect a few crucial pieces of information. The lender and the borrower should sit down together to decide the amount of money being borrowed, the transaction date, and when (and how) the money will be paid back. You can choose to go for a lump sum payment or you can have several installed payments. These are all details that must be agreed upon before putting everything in writing.

On November 1st, 2013 I, Patrick O’Brien, agreed to provide a loan of $6,000 to John Doe in cash/check/traveler’s check/money order.

John Doe agrees to repay the entire loan of $6,000 by April 1st, 2014. There will be no interest charged to this loan if the loan is fully repaid by April 1st, 2014.

If John Doe fails to repay the entire loan of $6,000 by April 1st, 2014, a monthly interest rate of 10% will be added to the $6,000 until payment is completed.

Patrick O’Brien (Lender), Signature
John Doe (Borrower), Signature

Additional Tips for your Contract to Pay Back Money


In order to strengthen the legitimacy of the contract, you may want to also add a witness section, in which a third party can validate the claims made on the contract. If you are certain that you will get your money back, a witness might not be necessary, however, it is often a good additional measure to have just in case you end up in court.

Notary Public

Similar to having a witness, it might be in your best interest to get your contract notarized by a notary public. The notary public is usually a lawyer who will verify that the signatures on the contract are authentic and not forged. You can easily find one near you by doing a simple Google search or asking at your local bank.

Terms of Default

In order to have a fully comprehensive contract, it is important to have a terms of default section. In the sample above, failure to repay the loan in a timely manner resulted in an interest rate of 10%. Another term of default could be loss of collateral, which forces the borrower put up collateral in the form of a car, house or jewelry when they borrow money. If the borrower fails to pay back the loan, he or she will have to give up the item they put up for collateral.

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