Down payments, tuition top-ups, a bridge between jobs — most parents will lend to an adult child eventually. A parent to child loan agreement answers the one question courts, banks, in-laws, and siblings will all eventually ask: was it a gift, or a loan?
Lawyer-drafted versions of the same document start around $450. Here, drafting is free and one $29 fee — the borrower's by default — covers certification and both signatures.
When money passes from parent to adult child and nothing is written down, everyone fills the silence with their own version. The child’s spouse hears “gift.” The other siblings hear “advance on the inheritance.” You meant “loan.” Years later a divorce, an estate, or a falling-out forces a court to pick one — and courts often begin from a presumption that the parent must rebut with evidence from the time of the transfer.
A one-page agreement, signed before the money moves, is that evidence. It costs a few minutes; the alternative is litigation between people who share holidays.
The essentials fit on a page: both names, the amount, the date the money moves, a repayment schedule (monthly amounts or a defined event — “on sale of the condo” works), interest if any, and both signatures. Lend Right asks the questions in plain language, applies your province’s rules — age of majority, limitation period, the 35% federal interest cap — and both of you e-sign from your phones. Drafting is free; one $29 fee (the borrower’s by default) certifies the document with a tamper-evident signing certificate.
Draft free, e-sign together, and the question never comes up again.
Create my loan agreement →Often the opposite. When a parent transfers money to an adult child, Canadian courts frequently start from a presumption that must be rebutted with evidence of what was intended. A signed agreement, made at the time of the advance, is exactly that evidence.
This is the scenario that fills family-law dockets. A documented loan is a family debt that generally must be repaid before assets are divided; an undocumented transfer is routinely argued to be a gift that stays in the matrimonial pot. Paper decides which story wins.
Lenders ask whether down-payment funds are borrowed and factor real obligations into debt ratios — so never sign a bank gift letter for money you privately treat as a loan. Decide honestly which it is; if it's a loan, disclose it and document it.
There's no obligation to. Most parent-child loans are interest-free; some families use the CRA prescribed rate (3% for 2026) where investment income or tax planning is involved. Anything under the 35% APR criminal cap is lawful.
Who runs this: Lend Right is a product of RULE8 Inc. · Last reviewed July 3, 2026 by the Lend Right Editorial Team.
Based on: the Criminal Code s. 347 interest ceiling (35% APR); provincial limitation statutes and electronic-commerce acts, which differ by province; CRA prescribed rate, 3% for 2026.
What this is (and isn't): a self-help drafting tool for ordinary loans between individuals — not legal or tax advice, no lawyer-client relationship, Quebec not yet supported. Bring in a lawyer where the loan secures property, funds a business, or sits inside a separation or estate.
On e-signing: electronic signatures are valid for ordinary contracts in every supported province; the finished agreement is a locked PDF whose certificate records each signer and timestamp. That's strong evidence of the contract — a court still weighs the facts of the loan itself.
Lend Right provides self-help document automation, not legal advice, and no lawyer-client relationship is created. For complex situations, consult a licensed lawyer in your province.