Loan agreements Templates for Thailand :

A loan agreement is a binding document that defines the terms of a lending relationship — the amount borrowed, the repayment schedule, the applicable interest rate, and the consequences of default. Beyond these core elements, well-structured loan agreements typically include security provisions, collateral arrangements, early repayment conditions, events of default, and dispute resolution mechanisms that determine how conflicts are handled if the borrower fails to meet its obligations.

In Thailand, loan agreements are primarily governed by Sections 650 to 656 of the Civil and Commercial Code (CCC), which regulate the formation of the loan, the transfer of ownership of the borrowed funds, and repayment obligations. Under Section 654, the applicable interest rate is capped at 15% per annum — any clause providing for a higher rate will be reduced to the legal maximum by Thai courts, regardless of what the parties have agreed. Section 655 further prohibits the capitalisation of interest, meaning that unpaid interest cannot itself accrue further interest. Where the loan is secured — by a mortgage, a pledge, or a personal guarantee — additional formalities may apply under Thai law, including registration with the Land Department for real property security.

Loan agreements in Thailand are also frequently used in the context of shareholder loans, intercompany lending, and private financing arrangements between individuals. In these situations, the absence of a written agreement — or the use of a poorly drafted template — frequently leads to disputes over repayment terms, interest calculations, and the characterisation of the funds as a loan rather than a capital contribution. A properly drafted loan agreement eliminates this ambiguity from the outset.

More broadly, a loan agreement is enforceable only if its terms are clear and its object is lawful — as established under Sections 354 to 369 of the CCC for contract formation, and Sections 149 to 153 for void and voidable acts. Agreements that are ambiguous, incomplete, or contrary to public order may be deemed void — a risk that generic or poorly drafted templates frequently fail to address.