Promissory Note

Promissory Note

Use this promissory note (IOU) form to outline everything you need to lend or borrow money.  You can choose the terms of the loan from within this form: 

  • installment loan without interest
  • installment payments with interest
  • lump-sum payment
  • interest-only payments (balloon payment)

If you are securing your loan with personal property, make sure to print and use the "Security Agreement for Borrowing Money" form.

NOTE:  Do not use this form or the Security Agreement for Borrowing Money if you want to secure the loan/promissory note with real property.

You can save and edit the form before you buy--just create a Nolo.com account. It's easy, free, and there's no obligation to buy anything. If you purchase the form, you'll be able to print, send, or download it at any time during your one year subscription.

See below the form for a full product description.

Promissory Note

Borrower

Alternate Selection: [number of borrowers]
Label Contract Text
one


two



three




four





Lender


Alternate Selection: [loan options]
Label Type of Loan
installment payments
Alternate Selection: [types of installment payments]
Label Contract Text
no interest

Installment Loan Without Interest

In return for a loan Borrower has received from Lender, Borrower promises to pay to Lender the amount of $ (principal). If there is more than one borrower, they agree to be jointly and severally liable.

Monthly Payments

Borrower will make equal installments of $ per month until the principal is paid in full. Payments will be due on the  day of each month, beginning on . In return for a loan Borrower has received from Lender, Borrower promises to pay to Lender the amount of $ (principal), until it is paid in full. 

amortized

Installment Loan With Interest (Amortized)

In return for a loan Borrower has received from Lender, Borrower promises to pay to Lender the amount of $ (principal), plus interest on unpaid principal at the rate of % per year from the date this note is signed until it is paid in full.  If there is more than one borrower, they agree to be jointly and severally liable.

Monthly Payments

Borrower will pay back the loan in monthly amortized installments, which include principal and interest, of not less than $ until the principal and interest are paid in full. Payments will be due on the  day of each month, beginning on .

Prepayments

Borrower may make extra payments of principal, in addition to the monthly installment payments, at any time. Borrower will identify any such payments, in writing, as prepayments of principal. Lender will use any prepayments to reduce the amount of principal owed by Borrower. In the event of prepayment, Lender will recalculate the amount of interest to be paid and the number of monthly payments due.

Late Payments

If any installment payment due under this note is not received by Lender within  days of its due date, the Borrower will pay a late fee of 5% of the amount of the monthly payment. The late fee will be due immediately.

If any installment payment is not received by Lender within  days of its due date, Lender may demand that Borrower repay the entire amount of unpaid principal immediately. If Lender notifies Borrower, in writing, that the entire amount is now due and payable, Borrower will immediately pay the entire unpaid principal.

lump sum payments
Alternate Selection: [lump sum]
Label Contract Text
with interest

Lump-Sum Loan With Interest

In return for a loan Borrower has received from Lender, Borrower promises to pay to Lender the amount of $ (principal), plus interest on unpaid principal at the rate of % per year from the date this note is signed until it is paid in full. If there is more than one borrower, they agree to be jointly and severally liable for the loan.

Due Date and Repayment Terms

Borrower will repay the entire amount owed by .

Prepayments

Borrower may make payments of principal at any time before the loan is due. Borrower will identify any such payments, in writing, as prepayments of principal. Lender will use any prepayments to reduce the amount of principal owed by Borrower.

without interest

Lump Sum Loan Without Interest

In return for a loan Borrower has received from Lender, Borrower promises to pay to Lender the amount of $ by . If there is more than one borrower, they agree to be jointly and severally liable.

Late Payments

If payment due under this note is not received by Lender within  days of its due date, the Borrower will pay a late fee of 5% of the amount of the payment. The late fee will be due immediately.

interest-only payments

Loan

In return for a loan Borrower has received from Lender, Borrower promises to pay to Lender the amount of $ (principal), plus interest on unpaid principal at the rate of % per year from the date this note is signed until it is paid in full.  If there is more than one borrower, they agree to be jointly and severally liable.

Interest Payments

Alternate Selection: [interest payments]
Label Contract Text
annually

Borrower will pay interest of  $ on  of each year, beginning on .

monthly

Borrower will pay interest of $ on the  day of each month, beginning .

other

Borrower will pay interest as follows: .

Principal Payment

Borrower will pay the principal in full on or before , together with any accrued interest.

Prepayment of Principal

Borrower may make payments of principal, in addition to the regular interest payments, at any time. Borrower will identify any such payments, in writing, as prepayments of principal. Lender will use any prepayments to reduce the amount of principal owed by Borrower. In the event of prepayment, Lender will recalculate the amount of interest to be paid.

Late Payments

If any installment payment due under this note is not received by Lender within  days of its due date, Borrower will pay a late fee of 5% of the amount of the monthly payment. The late fee will be due immediately.

If any installment payment is not received by Lender within  days of its due date, Lender may demand, in writing, that Borrower repay the entire amount of unpaid principal immediately. After receiving Lender's demand, Borrower will immediately pay the entire unpaid principal.

Payment and Notice Address

Borrower will send all payments to .

Lender will send all notices required under this Agreement to .

Security

Alternate Selection: [secured or unsecured]
Label Contract Text
unsecured This is an unsecured note.
secured Until the principal and interest owed under this note are paid in full, this note will be secured by a security agreement and Uniform Commercial Code Financing Statement giving Lender a security interest in certain equipment, fixtures, inventory, or other assets, as described in the security agreement.

Severability

If any court determines that any provision of this agreement is invalid or unenforceable, any invalidity or unenforceability will affect only that provision and will not make any other provision of this agreement invalid or unenforceable and such provision shall be modified, amended, or limited only to the extent necessary to render it valid and enforceable.

Attorneys' Fees

If Lender sues Borrower to collect on this note, and wins, Borrower agrees to pay Lender's attorneys' fees in an amount the court finds to be fair and reasonable.

Entire Agreement

This note represents the entire agreement between Borrower and Lender. Any modifications must be in writing and signed by both Borrower and Lender.

Keep Together

Terminology

The term Borrower refers to one or more borrowers. The term Lender refers to more than one lender and to any person who legally holds this note, including a buyer in due course.

Alternate Selection: [number of borrowers]
Label Contract Text
one

Borrower's Signature

Signature: ________________________________________
Date: _____________________________________________

two

Borrowers' Signatures

Signature: ________________________________________
Date: _____________________________________________


Signature: ________________________________________
Date: _____________________________________________

three

Borrowers' Signatures

Signature: ________________________________________
Date: _____________________________________________


Signature: ________________________________________
Date: _____________________________________________
 

Signature: ________________________________________
Date: _____________________________________________

four

Borrowers' Signatures

Signature: ________________________________________
Date: _____________________________________________
 

Signature: ________________________________________
Date: _____________________________________________
 

Signature: ________________________________________
Date: _____________________________________________
 

Signature: ________________________________________
Date: _____________________________________________

 

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