Personal Loan Agreement

A personal loan agreement (byakigat rin chukti) is the written contract between a lender and a borrower recording a private loan — either between individuals, or between an individual and a small business. Unlike a bank loan, private personal loans are usually not backed by a formal credit assessment, so the written agreement carries the entire evidentiary weight if the borrower doesn't repay. Its job is to convert what is otherwise a fuzzy handshake understanding into a document a civil court will enforce: the exact principal, whether interest applies and at what rate, the repayment schedule (lump-sum or instalment), any collateral, and the consequences of default. Under Sections 6 and 7 of the ICT Act, 2006, a ChuktiQ digital loan agreement signed with OTP verification carries the same evidentiary value as a paper agreement on stamp.

Stamp & registrationA simple loan agreement between individuals typically runs on Tk. 300 non-judicial stamp with two witnesses. If the loan is backed by immovable property, that requires a separate registered mortgage deed under the Registration Act, 1908. Interest is legal so long as the rate is written into the agreement and not usurious — Bangladeshi courts can reopen and reduce an unreasonably high rate; confirm the current statutory ceiling and enforcement mechanism with a lawyer before writing a specific rate.

What this agreement typically contains

Lender's and borrower's full identity — name, address, NID, phone
Principal loan amount in figures and words
Purpose of the loan (optional but recommended)
Interest rate (annual % simple or compound) — leave zero if interest-free
Repayment schedule — lump-sum date OR instalment table with dates and amounts
Mode of payment (bank transfer, bKash / Nagad, cash)
Late-payment penalty, if any
Collateral / guarantor details, if any
Consequences of default (acceleration of remaining instalments, legal action)
Signatures of lender, borrower, and at least one witness

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Frequently asked questions

Can I sue a borrower on the basis of a written loan agreement in Bangladesh?: Yes. A signed loan agreement is valid evidence under the Contract Act, 1872 and forms the primary evidence in a civil suit for recovery of money. A digital agreement created and OTP-signed on ChuktiQ has the same status under Sections 6 and 7 of the ICT Act, 2006. Note the deadline: Bangladesh's statute of limitations for a money-recovery suit is short (a fixed number of years from the date the loan became payable) — do not wait; confirm the current limitation period with a lawyer before filing to make sure you are still in time.
Is charging interest on a private loan legal?: Yes, provided the rate is (a) agreed in writing at the time of the loan, and (b) not usurious. Bangladeshi courts have long-standing powers to reopen and reduce interest that is 'excessive' relative to prevailing bank lending rates, and the specific statutory ceiling has been amended over time. Rather than relying on any specific benchmark number, keep the rate close to prevailing bank lending rates unless you have a strong justification, and confirm the current cap with a lawyer before writing a particular figure into your loan document.

Other contracts in this category

What this agreement typically contains

Lender's and borrower's full identity — name, address, NID, phone

Principal loan amount in figures and words

Purpose of the loan (optional but recommended)

Interest rate (annual % simple or compound) — leave zero if interest-free

Repayment schedule — lump-sum date OR instalment table with dates and amounts

Mode of payment (bank transfer, bKash / Nagad, cash)

Late-payment penalty, if any

Collateral / guarantor details, if any

Consequences of default (acceleration of remaining instalments, legal action)

Signatures of lender, borrower, and at least one witness

Frequently asked questions

Can I sue a borrower on the basis of a written loan agreement in Bangladesh?

Yes. A signed loan agreement is valid evidence under the Contract Act, 1872 and forms the primary evidence in a civil suit for recovery of money. A digital agreement created and OTP-signed on ChuktiQ has the same status under Sections 6 and 7 of the ICT Act, 2006. Note the deadline: Bangladesh's statute of limitations for a money-recovery suit is short (a fixed number of years from the date the loan became payable) — do not wait; confirm the current limitation period with a lawyer before filing to make sure you are still in time.

Is charging interest on a private loan legal?

Yes, provided the rate is (a) agreed in writing at the time of the loan, and (b) not usurious. Bangladeshi courts have long-standing powers to reopen and reduce interest that is 'excessive' relative to prevailing bank lending rates, and the specific statutory ceiling has been amended over time. Rather than relying on any specific benchmark number, keep the rate close to prevailing bank lending rates unless you have a strong justification, and confirm the current cap with a lawyer before writing a particular figure into your loan document.