A loan draft is a written request by an individual or group asking for the issuing of a specific sum of money as a loan. It outlines the amount requested, the intended purpose of the loan, the repayment terms, and any applicable interest charges that may be associated with the loan. The loan draft typically serves as a legally binding agreement between the borrower and lender. While it may not always be required in every loan transaction, it’s important to have one in place when it comes to protecting both parties involved.