A loan agreement not only details the terms of the loan, but it also serves as proof that the money, goods, or services were not a gift to the borrower. That is important because it prevents someone from trying to get out of repayment by claiming this, but it can also help you ensure that it is not an issue with the IRS later.
Loan agreements are an important part of borrowing money; they protect both the borrower and the lender. A loan agreement spells out the details of the transaction, including the loan amount, the interest rate, and the terms. Hope this helps!
