Promissory Note
FinancialA written promise by one party to pay a specific sum of money to another party under defined terms. Covers interest rates, repayment schedules, and default consequences.
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A written promise by one party to pay a specific sum of money to another party under defined terms. Covers interest rates, repayment schedules, and default consequences.
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Key Clauses
- 1
Principal Amount
States the total amount borrowed.
- 2
Interest Rate
Defines the annual interest rate and how it is calculated.
- 3
Repayment Schedule
Specifies payment amounts, frequency, and due dates.
- 4
Default and Remedies
Outlines consequences of missed payments and lender remedies.
- 5
Prepayment
States whether the borrower can repay early without penalty.
When You Need This
- Lending money to a friend, family member, or business associate
- Documenting a personal or business loan with formal terms
- Securing a down payment or installment agreement
Frequently Asked Questions
What is a Promissory Note?
A written promise by one party to pay a specific sum of money to another party under defined terms. Covers interest rates, repayment schedules, and default consequences.
What should a Promissory Note include?
A comprehensive promissory note should include: principal amount, interest rate, repayment schedule, default and remedies, prepayment.
When do I need a Promissory Note?
Lending money to a friend, family member, or business associate. Documenting a personal or business loan with formal terms. Securing a down payment or installment agreement.
Is this template legally binding?
Templates provide a strong starting point, but we recommend having important agreements reviewed by a qualified attorney in your jurisdiction to ensure they meet local legal requirements.
Can I customize this template?
Yes — all bracketed [placeholder] fields can be replaced with your specific information. You can also add, remove, or modify clauses to fit your particular situation.
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