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Promissory note template

A promissory note is a borrower’s written promise to repay a loan: how much, at what interest rate and on what schedule. Fill in the details below and it is laid out as a PDF with signature blocks for the borrower and the lender, ready to download or to send for signature.

This template is a general starting point, not legal advice. Laws differ between countries and states, so have it checked before signing anything important.

Fill in the details

Anything you leave empty becomes a blank line in the document, to fill in by hand or during signing.

Opens the signature request with this document and a signature box for each party already placed.

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Promissory Note

On __________, for value received, __________, of __________ ("Borrower"), promises to pay __________, of __________ ("Lender"), the principal sum of __________, together with interest as set out in this Promissory Note (the "Note").

1. Interest

Interest accrues on the unpaid principal from the date of this Note at __________. Interest will never be charged above the highest rate the law allows; any amount paid above that rate will be applied to the principal or refunded to Borrower.

2. Repayment

Borrower will repay the loan as follows: __________. All remaining principal and interest is due no later than __________.

Payments are made __________. Each payment is applied first to any late charges, then to accrued interest, and then to principal.

3. Prepayment

Borrower may repay all or part of the loan early at any time without penalty. An early payment reduces the principal and does not postpone the next scheduled payment.

4. Late Payments

Borrower will pay a late charge of __________, to the extent the law allows.

5. Default

Borrower is in default if a payment remains unpaid thirty (30) days after its due date, or if Borrower becomes insolvent or files for bankruptcy. If Borrower is in default, Lender may declare the entire unpaid principal and accrued interest immediately due by giving Borrower written notice.

If Lender takes legal action to collect amounts due under this Note, Borrower will pay Lender’s reasonable costs of collection, including reasonable attorney’s fees, to the extent the law allows.

6. Security

This Note is not secured by any collateral.

7. General

If Lender delays or does not exercise a right under this Note, Lender does not give up that right. Borrower waives presentment, demand for payment and notice of dishonor, to the extent the law allows. Lender may transfer this Note; Borrower may not transfer its obligations without Lender’s written consent.

This Note is governed by __________. If any part of it cannot be enforced, the rest stays in effect. It may only be changed in writing signed by Borrower and Lender. Lender signs below to confirm the terms of the loan.

Borrower

__________

Lender

__________

When a promissory note fits

Use a promissory note for a straightforward loan — between family members or friends, or between a business and its owner — with a fixed amount, an interest rate and a repayment schedule. A loan secured by a home or a vehicle needs a separate mortgage or security agreement, and lending money as a business is regulated.

Getting the numbers right

A note that does not add up invites an argument about what was really agreed.

  • State the interest rate as a yearly rate and say how it is calculated.
  • Make the schedule work: the payments should repay the principal and interest by the final due date.
  • Check your state’s maximum interest rate. Usury limits vary widely, and some states also cap late charges.
  • In the United States, a family loan that charges less than the IRS applicable federal rate can have tax consequences for larger amounts; ask a tax adviser.

Frequently asked questions

An electronically signed note is generally an enforceable promise between the borrower and the lender. It may not count as a negotiable instrument that can be sold or transferred like a paper note, because electronic signature laws treat negotiable instruments differently. If the lender may need to sell or pledge the note, for example to a bank, sign it on paper.

Usually not. A signed note is enforceable without a notary in most places, although notarization can make it harder for someone to dispute a signature later.

Under section 5, once a payment is 30 days overdue the lender can declare the whole balance due. If the borrower still does not pay, the lender’s usual remedy is a claim in court, which is why the note records the amounts and dates clearly.

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