Here is our collection of 17 free Promissory Note Templates that you can use to record a loan transaction officially or unofficially. For official documents, please consult your attorney as well. These word templates are useful when parties involved in a loan transaction don’t know how to document it for later use or reference. A promissory note is actually an agreement between the issuer and the borrower for a certain amount to be borrowed and returned on demand or at a specific date/schedule in full or by parts. Please find more information on the promissory note on Wikipedia.
It is a one-million-dollar question as to how to write a promissory note. It definitely follows with another question how many types of promissory notes are there? Can we use one Promissory Note for Real Estate and lend money from the bank? What is the difference between Security and Unsecured Promissory Notes?
No one can deny the need for an official Promissory Note during a legal transaction. However, you have to make sure that it fulfills all legal requirements. Make a list of features of promissory notes that you need in your transaction. Sometimes different promissory notes can also be used as credit devices. The most common type is promissory notes for personal loans. I am going to share with you several promissory note samples to help you write one most suitable for your needs.
Here is a description of some common mistakes that one shall avoid while writing a promissory note.
- One of the biggest mistakes is to overlook the credit history of borrowers. People often ignore getting information about it which becomes a natural source of worry for repayment. By looking at your credit history you will be able to resolve and abolish many issues regarding payments.
- You shall mention the Interest rate clearly in the promissory note. Most of the time people ignore it and consider a promissory message a casual or private written agreement for borrowing money or anything else. Interest rates must be according to local laws because higher interest rates may have some criminal consequences.
- Avoid missing security prerequisites while writing a promissory note. For instance, no security measure is defined if the person fails to repay the loan. To cope with such a situation some provision must be declared in a promissory note. Such as the property or any other valuable item will be taken if the borrower fails to settle up the loan.
- You shall consult an experienced lawyer before writing a promissory note. Individuals write promissory notes at home in case of family loans and do not use legal papers for the purpose. Similarly, many other legal requirements are not fulfilled which affects the effectiveness of the document.
- To make a promissory note a valuable agreement it must be signed by two reliable witnesses. And must be stamped and verified in front of a notary public, which enhances the value of promissory notes as a legal agreement.
- Sometimes people do not specify the maturity period for loans or deeds which also decreases the rights of lenders and weakens the case in court. So it is obvious to state the maturity date when the amount will be due in the promissory note. It will help in recovery through court.
- Occasionally people simply write a note about receiving a repayable amount and do not include the complete names and addresses of the lender and borrower which make it ambiguous and does not mention both parties clearly. A promissory note should include the complete names and addresses of both parties along with their ID numbers.
- A promissory note, as it is a legal document between two persons in which one promises to pay a specified amount on said date. It must include the mode of payment that one can follow to repay this amount.
By avoiding these stated mistakes in writing a promissory note you can make yourself safe from any loss in the future in case of making a deal about lending money to anyone.
Free Promissory Note Templates
I have used my favorite slight black background (reversed text) in the first template to make it distinctive in printing. Please let me know how you see my effort in putting up this word template here (obviously through comments.
Here are the previews of our promissory note templates.