We draft loan agreements that can be secured over property or unsecured. The loans are most commonly used for the purchase of a property. For example parents investing money into their children's home and they want to get the money back at a future date.

We can either act for the borrower or the lender but we can't act for both. The process is:

    Complete online Intentions Form
    Proof of ID Scan an in date passport or driving licence
    Proof of Address Scan 2 copies of your address within the last 3 months such as a utility/mobile phone invoice or bank statement
    Agreement We draft the loan contract and send to you for your approval. This service is available at a Fixed Fee of £399 INC VAT. If you wish to add any additional clauses or tailor the deed then our solicitor can help and will agree an additional fee with you for doing this. We will charge extra for material changes to the original intentions. We will draft the agreement based on your intentions and offer one free revision. Should you look to change your intentions, supply incorrect details or you require a bespoke service then our solicitor will charge for this work on an hourly basis of £300 INC VAT.
    Register Loan Agreement For an additional fee of £260 INC VAT we can register the agreement against the borrower's property for you. If there is already a first charge, such as a mortgage, then make sure to get lender consent to the second charge before instructing this service.

Due to our current activity we are unable to take on any new loan agreements at this time.

We work with another law firm who can take on this work. Get in touch for a free referral to a trusted firm, recommended by us. Fees may vary.

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Standard loan agreement or bespoke drafting?

We offer both fixed fee standard loan agreement templates that include the clauses required to allow the lender to enforce the debt at court. The cost of this loan agreement is kept lower and more competitive at £399 INC VAT. If however you'd prefer to tweak the agreement and have bespoke drafting we can help, however the cost for this drafting is charged at an hourly rate of £300 INC VAT as it often requires drafting from scratch with several versions as we tailor the agreement to meet your individual needs.
Frequently Asked Questions

Issues can arise when there is more than one lender named in the loan agreement because the party's intentions for repayment may differ.

We will only draft a loan agreement with more than one lender if the lenders are married or civil partners because their intentions are aligned. If the relationship between the lenders is anything else then we will draft two separate loan agreements to suit the intentions of each individual lender.

A loan contract is often registered over an asset like an house as security to ensure the loan is settled upon the sale, however not all loans are registered over property. Some relationships, such as family, choose a higher risk but more informal approach to the loan and don't register it.

We can help register the agreement for an additional charge of £260. The process is as follows:

    (if you have a mortgage) You need to obtain lender consent to the second charge being registered at the property. There is no point paying to register the loan if the lender won't allow a second charge. Your mortgage broker can help chase this.
    Loan contract is signed by borrower and lender and the original signed document is sent to Parachute Law in the post by recorded delivery.
    (if you have a mortgage) We contact your lender and obtain written consent to register a second charge. This can take upward of 10 working days to obtain consent from the lender.
    Land Registry forms are completed and submitted.
The loan is still repayable so the lenders can use the agreement to enforce repayment of the loan through the courts. The end result being that if the loan is never repaid that the lender could file for bankruptcy proceedings against the borrower.

It is however safer for all parties to register the loan contract over the property regardless of the relationship to avoid any dispute in the future or failure to pay.
The loan contract is drafted for both the borrower and the lender, however we will only act for one side; either the borrower or the lender.

We will verify the ID for whomever our client is, either the borrower or lender, and the other party should instruct a solicitor to act for them to provide independent legal advice regarding the terms of the agreement.
We do not operate a client account so do not receive the loan from you. We are only instructed to draft the agreement in accordance with your intentions and, if instructed to do so, register the agreement against the property.

We do not offer the service to verify the source of the funds for a loan nor can we receive the loan to send onto a conveyancer.

In cases where there is a conveyancer acting for a buyer then they will receive the loan either direct from you or from the borrower to their client account. The conveyancer should satisfy their own money laundering enquiries for the source of the money they are receiving. This should not be deferred to a third party solicitor.

The conveyancer should obtain satisfactory proof of the source of the loan directly from the lender.
The lender and the borrower both sign the loan contract. After this the lender sends the borrower the loan funds, either directly to them or to their conveyancer.

The agreement only requires a witness signature if the lender isn't charging any interest. If there is interest being paid, or any other consideration on top of the loan amount then the agreement does not need a witness signature.
Parachute Law does not offer a loan agreement template service at this time. Our fixed fee covers the drafting of your agreement by a professional solicitor.
While it can be awkward to ask a friend to sign a formal loan contract, it may be worth the discomfort to protect the friendship from any bitterness in the future.

It can be hard to get your money back without a legal agreement. Or, if you are the borrower, you might find that your friend suddenly demands their money back much earlier than the agreed repayment date.

Talk to a solicitor

Get in contact today to get straight talking legal advice from a specialist solicitor about a loan agreement.