29 Promissory Note Templates
Make it Legal with a Promissory Note Template
Are you in need of a template to help you create a legally binding promissory note? Have you considered one of the many promissory note templates that are currently available online? In this article we will briefly define the term “promissory note” and its function, show you what type of language/items should be included in your promissory note template and give you a few ideas on how you can secure one of these promissory note templates for your own purposes.
What Is a Promissory Note?
Have you ever borrowed money from someone, promising you would pay them back when you received your next paycheck? Most everyone has at least one time or another, and that “promise” you made, whether or not you kept the agreement, is the basis for a promissory note. Simply put, a promissory note is a written contract in which one party “promises” to repay the other party over a specified period of time. These types of documents are regularly used in business to help protect the lender from any losses they may incur.
The Promissory Note Template: What should be Included?
There are several ways to attain a promissory note template, but perhaps the most convenient—and least expensive—is to find one online. However, just finding a promissory note template online is seldom enough. In most cases you will almost certainly need to scour through many templates before finding one that is right for the specific transaction you are preparing. Here are just a few things to look for in a promissory note template:
• Lender’s name, signature and contact information. The name of the lender, whether it’s an individual or corporation, should be listed clearly and early in the document, with a space to sign and date the promissory note on the bottom.
• Borrower’s name, signature and contact information. Same rules apply for the borrower’s name and signature.
• Total dollar amount to be borrowed. The total dollar amount being borrowed should always be prominently displayed throughout the promissory note template.
• Date the transaction was entered into.
• Terms of Repayment. This is where it can get sort of tricky and the reason why not all promissory note templates are alike. The terms of repayment addresses items such as when the payments will be made, the amount of the payments and interest. Some notes ask the borrower to make monthly payments, while others may have only 4 quarterly payments or one large balloon payment at the end of the pay period. Just be sure the template you are considering matches the purpose and terms that you have laid out to your borrower.
• Penalties. This section should address the financial consequences of not meeting the terms of the promissory note.
Truth be told, it’s not very difficult to create your own promissory note template, but why do so if you can find a suitable alternative online? Promissory note templates are available on a variety of business preparation sites, and with many options to choose from, you’re almost certain to find one that is perfect for the transaction you are considering.