A promissory note is a written promise to pay money to someone. Its primary function is to serve as written evidence of the amount of a debt and the terms under which it will be repaid, including the rate of interest (if any). This helps both the lender and borrower know exactly what the expectations and plans for repayment are.

This promissory note allows for repayment in small installments with interest followed by a balloon payment. This is one way to keep individual payments lower than they normally would be, with the shortfall made up by one large balloon payment at the end of the loan term.

Important to Know:

• Typically, interest charged on loans between friends and family runs five to 10 percent. If you wish to charge more, check your state laws to make sure the rate is legal.
• Charging interest adds a level of complexity when it comes to figuring out the monthly payments and early payoff. Use an online amortization calculator (see instructions) to do this.
• If the lender and borrower decide to change the terms of a promissory note, use the "Agreement to Modify Promissory Note."
• If the borrower does not repay you according to the terms of your promissory note, considering using the "Demand for Overdue Repayment on Promissory Note."

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• cookies are disabled on your computer, or
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To expand the ZIP archive you download after making your purchase, you'll need:

• A decompression utility such as the following, both of which can be downloaded for free:

• 7-Zip (http://www.7-zip.org) (for Windows users).
• StuffIt Expander (http://my.smithmicro.com/mac/stuffit/expander.html) (for Macintosh). Please note: Many recently manufactured Macs have a native capability to decompress zip files. See your computer's user manual for verification of this and instructions for access.

To open, fill out and print an eForm, you need a word processor that "reads" RTF (rich text format) files:

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