������Ƶ

An IOU Agreement is a simple written promise to repay money borrowed from someone. While not as formal as a loan contract, it's still a legally binding document in Singapore when it includes the basic details: the amount borrowed, repayment terms, and signatures of both parties.

Under Singapore's Civil Law Act, these agreements are enforceable if they're properly documented and signed. Though commonly used between friends and family, IOUs can also serve as temporary business arrangements. Just remember that for significant amounts or complex terms, it's safer to use a formal loan agreement with professional legal guidance.

Use an IOU Agreement when you need to document a small, informal loan quickly—especially for temporary borrowing between friends, family members, or business associates in Singapore. It's perfect for situations where you need something more formal than a verbal agreement but less complex than a full loan contract.

This simple document works well for short-term arrangements under S$5,000, particularly when you trust the borrower but still want basic legal protection. Common scenarios include emergency cash needs, small business bridge funding, or helping a family member with unexpected expenses. For larger amounts or longer terms, opt for a proper loan agreement instead.

• Basic IOU: The simplest form used for personal loans, containing just the amount, date, and signatures.
• Installment IOU: Includes specific payment schedules and multiple payment dates.
• Secured IOU: Lists specific assets as collateral for the borrowed amount.
• Business IOU: More detailed version used between companies, including GST registration numbers and witness signatures.
• Interest-Bearing IOU: Specifies interest rates and calculation methods, common in longer-term arrangements.

• Individual Lenders: Friends, family members, or private individuals who loan money and need basic documentation of the debt.
• Individual Borrowers: People needing short-term loans who prefer informal arrangements over bank loans.
• Small Business Owners: Entrepreneurs using IOUs for quick bridge financing or temporary cash flow solutions.
• Sole Proprietors: Business individuals documenting informal loans between trusted business partners.
• Witnesses: Third parties who verify the signing of IOUs, especially for larger amounts or business transactions.

• Basic Details: Gather full names, NRIC numbers, and addresses of both lender and borrower.
• Loan Terms: Document the exact amount, currency, and any agreed interest rate.
• Payment Schedule: Specify repayment date(s) and installment amounts if applicable.
• Witness Information: Arrange for a neutral third party to witness the signing.
• Documentation: Make copies of relevant identification documents and keep them with the signed IOU.
• Digital Backup: Create and securely store electronic copies of all signed documents.

• Parties' Information: Full legal names, NRIC numbers, and current addresses of both lender and borrower.
• Loan Details: Exact amount in SGD, purpose of the loan, and date of lending clearly stated.
• Repayment Terms: Specific due date or payment schedule, including any interest rates.
• Default Clause: Consequences of non-payment or late payment.
• Governing Law: Statement that Singapore law governs the agreement.
• Signatures: Dated signatures of both parties and witness, with their printed names below.

An IOU Agreement differs significantly from a Loan Agreement in several key aspects. While both document borrowed money, their formality, legal strength, and typical use cases vary considerably in Singapore's legal framework.

• Legal Formality: IOUs are informal documents suitable for small, personal loans, while Loan Agreements are comprehensive contracts with detailed terms and conditions.
• Enforcement Power: IOUs provide basic evidence of debt but offer limited enforcement options. Loan Agreements give stronger legal protection and clearer enforcement paths.
• Content Detail: IOUs typically include just the basic amount, parties, and repayment date. Loan Agreements cover interest rates, default provisions, security arrangements, and dispute resolution.
• Common Usage: IOUs work best for trusted parties and small amounts under S$5,000. Loan Agreements are essential for business lending, larger amounts, or when dealing with unfamiliar parties.