What is the validity of an agreement made on a plain paper?

The loan agreement has evidentiary value when it is printed on stamp paper/e-stamp paper and signed by both parties. The stamp paper value depends on the particular State in which it is executed. Each party should thereafter keep a signed copy of the Loan Agreement. This can help to provide additional legal protection in case of any future disputes. 
It is important to ensure that the loan agreement is properly drafted and includes all the necessary terms and conditions including identification of parties, loan amount, repayment schedule and penalty clause.

Additionally, the number of witnesses required to execute a loan agreement depends on the state in which the agreement is executed. It is generally advisable to have at least two witnesses sign the loan agreement, as this can help to strengthen the legal validity of the agreement in case of any disputes in the future.
It is important to note that the witnesses must be competent to testify in a court of law. This means that they must be over the age of 18, of sound mind, and not a party to the loan agreement. The witnesses must also sign the loan agreement in the presence of the parties to the agreement, and provide their full name, address, and occupation.

A loan agreement which is not in compliance with the above rules is not enforceable in law and cannot be tendered as evidence in a court of law in a civil action against breach by the borrower.