<PAGE>
                                                                    EXHIBIT 10.7

                            LOAN AND PLEDGE AGREEMENT

      THIS LOAN AND PLEDGE AGREEMENT (this "Loan and Pledge Agreement") is
entered into as of the 10th day of April 2004, between eTelecare International,
Inc., a corporation organized under the laws of the Philippines (the "Secured
Party" or the "Company"), and James W. Franke (the "Debtor").

                                 R E C I T A L S

      A. Pursuant to a Stock Option Agreement (the "Option Agreement") between
the Company and Debtor dated as of January 1, 2003, Debtor has the right and
option to purchase 477,200 shares (the "Stock") of the Company's Common Stock
(the "Common Stock");

      B. Under the terms of the Debtor's Employment Agreement with the Company,
the Company has agreed to loan Debtor funds to cover all taxes arising from the
Employee's exercise of the aforementioned stock option;

      C. Debtor has determined the amount of taxes due to be US$42,000 and the
Company is accordingly lending Debtor the same amount (the "Loan") against the
execution by Debtor of this Loan and Pledge Agreement as of the date hereof;

      D. As security for the due payment and settlement of the Loan, Debtor is
willing to subject the Stock to the provisions of this Loan and Pledge
Agreement.

                                A G R E E M E N T

      NOW, THEREFORE, IT IS AGREED between the parties as follows:

      1. The Loan. Debtor hereby acknowledges receipt of, and promises to pay to
the order of Secured Party on the date that is three (3) years from the date
hereof, the principal sum of Forty Two Thousand US Dollars (US$42,000.00) (the
"Loan"), with interest on unpaid principal from the date hereof accruing at the
rate equal to the United States Federal Funds Rate as of the date hereof (which
shall be one percent (1.0%)) per annum (the "Interest"). Debtor reserves the
right to prepay all or any part of the Loan at any time without premium or
penalty.

      2. Pledge. Debtor hereby pledges unto the Secured Party the collateral
described in Paragraph 3 hereof as security for the due payment and performance
of all its obligations to Secured Party set forth in Paragraph 4 hereof.


      3. Collateral. The collateral on which the Pledge is created is Twenty One
Thousand (21,000) shares out of the Stock and all stock dividends, cash
dividends, liquidating dividends, new securities and all other property, monies
and rights to which the owner thereof may become entitled on account thereof,
and all proceeds thereof (the foregoing being hereinafter collectively referred
to herein as the "Collateral").

<PAGE>

      4. Obligations Secured. The Pledge created hereby secures the payment of
the Loan, the Interest and all indebtedness evidenced by, and performance and
discharge of each and every covenant, condition and agreement of Debtor
contained in, this Loan and Pledge Agreement, and any and all modifications,
extensions or renewals hereof;

      5. Warranty and Representation of Debtor. Debtor warrants and represents
that the Collateral is free and clear of any security interest (other than the
Pledge herein granted), liens, restrictions (other than the legends required by
law or by the Option Agreement and the restrictions on transfer imposed by any
applicable laws and the restrictions and rights contained in the Option
Agreement), or encumbrances, and that, with those exceptions, he has full right
and power to transfer the Collateral to Secured Party free and clear thereof,
and to enter into and carry out this Loan and Pledge Agreement. Secured Party
consents to the creation of the Pledge on the Collateral.

      6. Event of Default. As used herein "Event of Default" shall be any or all
of the following:


            (a) The failure of Debtor punctually and properly to observe, keep
or perform any covenant, agreement or condition required by this Loan and Pledge
Agreement to be observed, kept or performed;

            (b) The failure of Debtor punctually and properly to pay the Loan,
the Interest and all indebtedness evidenced hereby within ten (10) days after
the same are due in accordance with the terms hereof;

            (c) The failure of Debtor punctually and properly to observe, keep
or perform any of the obligations secured by this Loan and Pledge Agreement;

            (d) The bankruptcy or insolvency of Debtor,

            (e) The sale, transfer or conveyance of the Collateral or a portion
thereof by Debtor.

      7. Rights of Secured Party upon Occurrence of Certain Events or an Event
of Default. Upon the occurrence of an Event of Default described in Paragraph 6
(a) to (d), Secured Party may declare the entire unpaid principal and interest
of the Loan immediately due and payable without demand or notice and may
exercise any or all of its rights and remedies under the applicable laws.
Further, upon the occurrence of an Event of Default described in Paragraph 6
(e), the entire unpaid principal and interest of the Loan shall become
immediately due and payable without demand or notice and Secured Party may
exercise any or all of its rights and remedies under the applicable laws. All
rights and remedies of Secured Party shall be cumulative and may be exercised
successively or concurrently and without impairment of the Secured Party's
interest in the Collateral.

      8. Power of Attorney. Debtor hereby irrevocably constitutes and appoints
the Company his true and lawful attorney in fact with power of substitution and

                                      -2-
<PAGE>

resubstitution, to transfer the Collateral on the books of the Company, or to
cause it to be transferred, whenever authorized to do so as provided in this
Loan and Pledge Agreement; such appointment shall be deemed to be coupled with
an interest. Such authority shall terminate when none of the Collateral is
subject to the Pledge.

      9. Termination. This Agreement will terminate when Debtor completes
performance in full of all obligations hereunder, including without limitation
the repayment of all indebtedness by the Debtor to the Secured Party.

      10. Miscellaneous.

            (a) No Waiver of Rights or Remedies. No failure or delay by Secured
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, and no single or partial exercise thereof shall preclude any
other or further exercise or the exercise of any other right, power or
privilege.

            (b) Waiver of Statute of Limitations. To the extent permitted by
law, Debtor hereby waives, and agrees not to assert or take advantage of, any
and all applicable statutes of limitations on the obligations secured hereby.

            (c) Severability. Should any one or more of the provisions hereunder
be determined to be illegal or unenforceable, all other provisions hereof shall
be given effect separately therefrom and shall not be affected thereby.

            (d) Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if delivered personally or sent
by registered or certified mail, postage prepaid, as follows:

      If to Secured Party, to
      eTelecare International, Inc.
      19th and 20th Floors
      Citibank Plaza
      Eastwood Cyberpark
      Libis, Philippines

      or if to Debtor, to
      James W. Franke
      3701 Madison Road
      Flintridge, CA 91011

      or to such other address as shall be furnished
      in writing by any party to the others.

Notice shall be deemed to have been given as of the date so delivered or
deposited in the applicable mail system, as the case may be.

                                      -3-
<PAGE>

            (e) Assignment by Secured Party. This Loan and Pledge Agreement and
the Pledge shall inure to the benefit of Secured Party, and successors and
assigns and any transferees of any of the obligations secured hereby, and shall
be binding upon the Debtor and his heirs, executors, administrators, legal
representatives, successors and assigns; provided that Debtor may not assign his
rights under this Agreement without the prior written consent of the Secured
Party; provided, further, that Debtor may transfer the Collateral to the [name
of trust] (the "Trust") without any such approval of the Secured Party, provided
the Trust shall agree to be bound by all of the terms and conditions of this
Agreement as if the Trust was the Debtor and provided, further, that Debtor
shall not be relieved of any of its duties or obligations under this Agreement.

            (f) Attorneys' Fees. Debtor agrees to pay Secured Party without
demand all fees, costs and expenses of enforcing this Loan and Pledge Agreement
or any provision hereof, including without limitation such fees, costs and
expenses of attorneys (whether or not any litigation is commenced), and further
including, without limitation, fees, costs and expenses of appeal.

            (g) Choice of Law. It is the intention of the parties that the
internal laws of the Philippines shall govern the validity of this Loan and
Pledge Agreement, the construction of its terms and the interpretation of the
rights and duties of the parties.

            (h) Paragraph Headings. Paragraph and other headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning of this Loan and Pledge Agreement or its interpretation.

            (i) Integrated Agreement. The foregoing constitutes the entire
agreement between the parties hereto on the subject matter hereof, and there are
no agreements, understandings, restrictions, warranties or representations
between the parties other than those set forth herein or herein described or
provided for.

                                 ETELECARE INTERNATIONAL, INC.


                                 By: /s/ ROBERTO O. VALDES
                                     -------------------------------------------
                                 Name:  ROBERTO O. VALDES
                                 Title:    Chief Financial Officer
DEBTOR


/s/ JAMES W. FRANKE
--------------------------------
James W. Franke

                                      -4-
<PAGE>

                           SIGNED IN THE PRESENCE OF:


            --------------------                         --------------------

                                 ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)
MAKATI CITY, METRO MANILA) S.S.

      BEFORE ME, a Notary Public for and in the above jurisdiction this 21st day
of January 2005 personally appeared the following:

<TABLE>
<CAPTION>
                           Community Tax
      Name                 Certificate No./              Date/Place Issued
      ----                 ----------------              -----------------
<S>                       <C>                        <C>
Roberto O. Valdes                                    January 13,2005/Manila

James W. Franke                                      March 17, 1997/Los Angeles
                          (passport number)
</TABLE>

known to me and to me known to be the same persons who executed the foregoing
Loan and Pledge Agreement and acknowledged to me that the same is their free and
voluntary act and deed.

            WITNESS MY HAND AND SEAL on the date first abovewritten.

Doc. No.         157;
Page No.          32;
Book No.         III;
Series of 2005.

                                        /s/ FRED B. PAMAOS
                                        [Notary Stamp & Signature]

                                      -5-
<PAGE>

                             SECURED PROMISSORY NOTE

$42,000.00                                   April 10, 2004
                                             Libis, Philippines

      FOR VALUE RECEIVED, Jim Franke ("Maker") hereby promises to pay to the
order of eTelecare International, Inc., a corporation organized under the laws
of the Philippines ("Holder"), at the offices of Holder located at 19th and 20th
Floors, Citibank Plaza, Eastwood Cyberpark, Libis, Philippines, or at such other
place as Holder may from time to time designate in writing, the principal sum of
Forty Two Thousand US Dollars (US$42,000.00), with interest on unpaid principal
from the date hereof accruing at the rate equal to the United States Federal
Funds Rate as of the date hereof (which shall be one percent (1.0%)) per annum,
on the date that is three (3) years from the date hereof. Maker reserves the
right to prepay all or any part of this Promissory Note (the "Note") at any time
without premium or penalty.

      This Note is secured by a security interest created by a Pledge Agreement
of even date herewith (the "Pledge Agreement") and is subject to the terms and
conditions thereof.

      If Maker fails to pay any principal or interest within ten (10) days after
the same is due, or if any other default occurs under this Note, the Pledge
Agreement or any other document now or in the future securing this Note, the
entire unpaid principal balance, accrued interest and other sums payable
hereunder and under the Pledge Agreement shall, at the option of Holder, become
immediately due and payable without demand or notice. Further, in the event
Maker sells, transfers or conveys the Stock or a portion thereof, all
indebtedness evidenced by this Note shall become immediately due and payable
without demand or notice.

      Maker agrees to pay to Holder all fees, costs and expenses incurred by
Holder in enforcing its rights under this Note and the Pledge Agreement,
including, without limitation, such fees, costs and expenses of attorneys,
whether or not litigation is commenced.

      Terms used herein and defined in the Pledge Agreement shall have the same
meaning ascribed to them therein, unless otherwise defined herein.

<PAGE>

      This Note is being delivered and is intended to be performed in the
Philippines, and shall be governed by and construed and enforced in accordance
with the internal laws of the Philippines.

      This Note shall be binding upon and inure to the benefit of the parties
hereto and their respective legal representatives, successors and assigns;
provided, however, that no assignment of any of Maker's rights or obligations
shall be made without the written consent of Holder.

      Should any one or more of the provisions of this Note or of any agreement
entered into pursuant to this Note be determined to be illegal or unenforceable,
all other provisions of this Note and of each other agreement entered into
pursuant to this Note, shall be given effect separately from the provision or
provisions determined to be illegal or unenforceable and shall not be affected
thereby. Any payment hereunder shall be credited first upon interest accrued and
the remainder, if any, upon principal; interest shall cease to accrue upon
principal so credited. Principal and interest shall be payable in lawful money
of the United States of America.


                                    /s/ JIM FRANKE
                                    --------------------------------------------
                                    Jim Franke

                                      -2-
<PAGE>

                           SIGNED IN THE PRESENCE OF:


            --------------------                         --------------------

                                 ACKNOWLEDGMENT


REPUBLIC OF THE PHILIPPINES)
MAKATI CITY, METRO MANILA) S.S.

      BEFORE ME, a Notary Public for and in the above jurisdiction this 15th day
of December 2004 personally appeared the following:

<Table>
<Caption>
     Name                    Passport No.              Date/Place Issue
     ----                    ------------              ----------------
<S>                          <C>                   <C>
JIM FRANKE                                         March 17, 1997/Los Angeles
</Table>

known to me and to me known to be the same persons who executed the foregoing
Loan and Pledge Agreement and acknowledged to me that the same is their free and
voluntary act and deed.

            WITNESS MY HAND AND SEAL on the date first abovewritten.

Doc. No.          59;
Page No.          12;
Book No.         III;
Series of 2004.

                                             /s/ MARICHELLE Q. GERARDO
                                             [Notary Stamp]

                                      -3-