Loan Agreement
What to review in a loan agreement before you sign
A loan agreement should make the true cost of money obvious before funds move. Verify principal, interest rate type, compounding, fees, prepayment penalties, and the full repayment schedule. Default definitions deserve close reading: missing a payment is expected, but technical defaults—like a drop in financial ratios or a cross-default with another loan—can accelerate the whole balance unexpectedly. If collateral or personal guarantees are involved, understand what assets are pledged and when the lender can seize them. Borrowers and small lenders should also check representations, reporting duties, amendment rules, and governing law. Contract Analyzer lets you upload a loan agreement PDF, DOCX, or TXT and receive a structured report with score, verdict, findings, missing clauses, and key terms. The analysis is informational only—not legal or financial advice—so you can spot expensive surprises before committing.
Red flags
Watch for these issues in a loan agreement.
- Interest, fees, or APR that are incomplete or inconsistently stated
- Prepayment penalties that make early payoff expensive
- Broad events of default beyond missed payments
- Immediate acceleration with little or no cure period
- Open-ended personal guarantees covering future debts
- Blanket liens on all business or personal assets
- Cross-default clauses tied to unrelated obligations
- Unilateral lender amendment or rate adjustment rights
Red flags are starting points, not automatic deal-breakers. Context matters: a harsh clause may be negotiable, industry-standard, or offset elsewhere in the document. Use them to prioritize what you verify next — then confirm the exact wording in your file. For a general pre-sign frame, see the contract checker checklist.
Key clauses
Clauses worth locating before you commit.
Knowing the clause names helps you search the PDF and ask sharper questions. If a listed clause is absent, that absence itself may be the finding — especially for termination, liability, payment timing, or confidentiality scope.
Contract Analyzer surfaces many of these as findings or missing-clause notes in a structured report. Learn more about the method on what contract analysis is and how the product compares to enterprise tools on contract analysis software. Credit costs are explained on pricing; deeper explainers live on the blog.
Related types
Explore similar agreements.
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Lease Agreement
A rental contract that sets rent, term, deposits, repairs, and rules for living or operating in a property.
Service Agreement
A services contract that defines deliverables, fees, timelines, warranties, and each party’s responsibilities.
Severance Agreement
A separation agreement that trades severance pay or benefits for releases, ongoing restrictions, and exit terms.
FAQ
Questions about loan agreement review
What is loan acceleration?
Acceleration lets the lender demand the entire unpaid balance after a default. Without a cure period, a minor miss can become an immediate full repayment demand.
Should I worry about personal guarantees?
Yes. A personal guarantee can put your personal assets at risk even if the loan is for a business. Limit amount, duration, and future indebtedness where possible.
What fees appear besides interest?
Origination, late, NSF, documentation, and collection fees are common. Add them up to understand the real cost of borrowing.
Can I prepay a loan early?
Only if the agreement allows it. Some loans permit prepayment freely; others charge penalties or require yield maintenance.
Does Contract Analyzer calculate APR for me?
It highlights key terms and risk findings in an informational report. For precise APR math or lending advice, use a financial professional.
Ready to review a loan agreement?
Create an account, buy a credit pack, upload your document, and get a structured report with findings and quotes. Not legal advice.