A loan agreement letter between two parties is a legal document that outlines the terms of a loan between two individuals, businesses or entities. It defines the amount of money to be borrowed, the duration and interest rate of the loan, any collateral needed to secure the loan, and when and how the borrower must repay the lender. The letter also enumerates all the rights and responsibilities of both parties in relation to the loan, and is legally binding once signed by both parties. A loan agreement letter is an essential document for protecting both the lender and the borrower and should be created with care and attention to detail.