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Loan Workout Agreement Sample

As the global economy continues to experience its ups and downs, many individuals and businesses are finding it challenging to overcome financial difficulties. One solution that has become increasingly popular in recent years is a loan workout agreement. This type of agreement allows borrowers to restructure their loan terms to make them more affordable and manageable.

If you are considering a loan workout agreement, it is important to understand what it entails. In this article, we will provide you with a loan workout agreement sample and some key information to help you make an informed decision.

What is a Loan Workout Agreement?

A loan workout agreement is a type of negotiation between a borrower and a lender to modify the terms of an existing loan. The primary goal of a loan workout agreement is to make the loan more affordable for the borrower while providing some level of protection for the lender. A loan workout agreement can also help the borrower avoid defaulting on the loan and suffering the associated consequences, such as damage to their credit score and additional fees.

Loan Workout Agreement Sample

To give you a better understanding of what a loan workout agreement might look like, here is a sample agreement:

Loan Workout Agreement between [Borrower Name] and [Lender Name]


The purpose of this agreement is to modify the existing loan between [Borrower Name] and [Lender Name] to provide a more affordable repayment plan.

Agreement Details:

– The interest rate on the loan will be reduced to [X] percent.

– The loan term will be extended by [X] months.

– Monthly payments will be reduced to [X].

– Late fees will be waived.

– The borrower agrees to make all payments on time.

– The lender agrees not to take any legal action against the borrower for the duration of the loan workout agreement provided that the borrower complies with the terms of the agreement.

– The lender retains the right to take legal action if the borrower fails to comply with the terms of the agreement.

– The borrower and lender agree to sign a separate agreement once the loan workout agreement has been successfully completed.


A loan workout agreement can be an excellent way for borrowers to restructure their loans and make their payments more affordable. However, it is essential to approach this type of agreement with caution and make sure you fully understand the terms. With the above loan workout agreement sample and the information provided in this article, you should have a good idea of what to expect and what to look out for. Always consult with a legal professional before signing any legal agreement.