Secured loan agreement template

Use a clear and customisable template to help ensure an agreement protects your interests.

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Whether you're lending or borrowing money, loans can be a risky business if the process isn't managed with care. When you enter into a secured loan, it's essential that there's an agreement in place to reduce the risk.

If you haven't got the time, or spare cash, to invest in tailored legal help, you can utilise a secured loan template online. The right template can help you understand what to include, and what not to include, in your document. Let's take a closer look.

What is a secured loan?

To understand what a secured loan agreement is, you'll first need to understand exactly what a secured loan is.

A secured loan is a type of personal loan that uses collateral to protect the lender. Collateral is a high-value item that the borrower risks losing to the lender if the loanee can't repay the loan as outlined in the agreement. Usually, the collateral offered is a home or car, but it can also be business equipment, copyright, shares, insurance policies or even precious metals such as gold.

What is a secured loan agreement?

A secured loan agreement is a legally binding contract between a lender and a borrower. It typically outlines the terms and conditions for borrowing the money, and the responsibilities of both parties involved. In it, the borrower puts a high-value item on the line as a form of security for the lender, otherwise known as collateral.

Get a secured loan agreement template

loan agreement template from Lawpath

Download this template at Lawpath

More on where to find secured loan agreement templates

It's easy to find expert-vetted secured loan agreement templates online. We've done some of the hard yards for you and found leading online legal services with secured loan templates. It's important to note that some of these templates will simply be labelled as 'loan agreement templates'. However, customisable features will allow you to use them for your needs.

  • Lawpath. Amongst its huge library of legal templates, Lawpath offers users the options to edit and download a loan agreement template in just a few minutes.
  • Law Depot. For $4.99/month, you can enjoy unlimited access to LawDepot's legal templates, including a loan agreement template.
  • LawLive. Get your hands on a legal template tailored specifically to secured loan agreements for a one-time fixed fee.
  • LegalVision. Use LegalVision's loan agreement template for $49 or seek the help of a lawyer for legal advice and support.
  • NetLawman. Download a loan agreement template for $29 or ask a lawyer to draft and review your document for a fixed fee.
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Knowing when to use a secured loan agreement template

It's important to use a secured loan agreement template in Australia whenever a borrower is putting up collateral as a protection mechanism for the lender. A secured loan can take many different forms. These may include:

What's included in a secured loan agreement?

A secured loan agreement should include a number of key clauses to ensure that both parties are protected throughout the duration of the loan. You may find that the legal templates available online encourage you to include the following:

  • Personal details. For legal purposes, you'll want to include the name, address and contact details of all parties involved in the agreement.
  • Definitions. Any well-written legal document should define all standard terms in a glossary at the start of the document.
  • Loan amount and interest. Clearly define how much the borrower is lending and if any interest will be paid on the outstanding amount.
  • Schedule of payments. Define how often payment should be made and how much these will be. Here, it's also important to state an end date, by which the loan should be repaid.
  • Collateral. It's important to include what the borrower is offering as collateral to the lender and in what capacity. What is the lender entitled to if the borrower does not make the payments outlined in the agreement?
  • Responsibilities. Don't forget to discuss the rights and obligations of both the lender and borrower for the duration of the agreement.
  • Defaulted payments. What happens in the case of late or defaulted payment? Will the borrower incur any fees or charges in certain circumstances?
  • Third-party guarantee. For an added layer of protection, a lender may ask for a third party guarantee. This is where someone, other than the borrower, agrees to pay the loan back if the borrower cannot do so.
  • Variations and waivers. You may want to include a clause that discusses whether changes can be made to the contract under specific circumstances. This must be agreed upon by both parties involved.

How effective is a secured loan agreement?

A well-structured loan agreement provides the lender with peace of mind that they will receive repayment for their loan in one way or another. It can also help the borrower to understand where they stand in an agreement, and under what circumstance their assets could be seized. This is only possible if you create a watertight agreement that details the borrower's obligations to repay the loan.

Do I need to go through a lawyer?

That's up to you to decide. A secured loan agreement can be a complex and important document to get right, which means it may be worth onboarding legal advice in one way or another. It can ease the burden of writing the document yourself by utilising the expertise of a lawyer. Alternatively, you may prefer to enlist the help of a legal professional to check over a draft you've already written up.

Along with your secured loan agreement, a lawyer can also help you to write up a general security agreement. This is a necessary document that allows the lender to seize property if the lender defaults payments. To do this, lenders must register the document on the Personal Property Securities Register or PPSR.

Find out how to write a secured loan agreement

It's important to include all of the key features outlined above in your secured loan agreement. This includes the loan amount, repayment schedule, interest rates, collateral details and default terms. If you choose to use a secured loan agreement template, you may find all of the essential terms and conditions are included already.

Understanding the differences between a secured loan agreement and an unsecured loan agreement

As we've previously discussed, a secured loan requires the borrower to provide collateral to reduce the lender's risk. These types of loans are most commonly used by banks, mortgage lenders and credit card providers.

An unsecured loan, on the other hand, doesn't require collateral. Instead, an unsecured loan generally demands a high-interest rate to reduce the risk for the lender. Unsecured loans are usually smaller amounts and are most common between businesses or individuals with an established relationship.

if you're looking for a loan, it's important to weigh up the pros and cons by exploring the difference between a secured and unsecured loan. This will help you to understand which is the right loan for you.

Secured loan

Unsecured loan


  • Lower risk to the lender.
  • Lenders can offer a lower interest rate to the borrower.
  • The borrower may be able to access higher loan amounts.
  • Available for those with low credit scores.
  • Little to no risk to personal property and assets.
  • Simpler and quicker application process.
  • Usually easier to obtain.


  • Longer processing times.
  • Risk of losing high-value assets if the borrower can't repay the loan.
  • Inflexible: the agreement will usually specify what the borrower can spend the money on.
  • Higher interest rate to mitigate risk.
  • Loans are generally for smaller amounts.
  • The lender may still be able to claim personal assets if the borrower defaults payment.
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