💵 Promissory Note Template — Free Template

A promissory note documenting a borrower's promise to repay a fixed sum to a lender. Includes interest, payment schedule, prepayment, default, and acceleration. Use for personal loans, business loans, and seller financing.

Who needs this

Anyone lending money — to family, between businesses, in connection with a sale, or as a seller financing real estate or equipment.

What it covers

• Principal, interest rate (or zero-interest)
• Payment schedule (lump sum, installment, balloon)
• Prepayment without penalty
• Late fees & default
• Acceleration on default
• Optional collateral / security
• Governing law

Template clauses

1. Promise to Pay

FOR VALUE RECEIVED, [BORROWER NAME], located at [BORROWER ADDRESS] ("Borrower"), promises to pay to the order of [LENDER NAME], located at [LENDER ADDRESS] ("Lender"), the principal sum of $[PRINCIPAL AMOUNT] (the "Principal"), together with interest as set forth below, in lawful money of the United States.

2. Interest

Interest shall accrue on the unpaid Principal balance from the date of this Note at the simple rate of [INTEREST RATE]% per annum. Interest shall be computed on the basis of a 365-day year for the actual number of days elapsed. In no event shall the interest rate exceed the maximum rate permitted by applicable law; if any payment would result in a higher rate, the excess shall be applied to reduce the Principal.

3. Payment Schedule

{{#when repayment_structure=lump_sum}}LUMP SUM. The entire Principal and all accrued interest shall be due and payable in a single payment on [MATURITY DATE].{{/when}}{{#when repayment_structure=monthly}}MONTHLY INSTALLMENTS. Borrower shall make equal monthly payments of $[MONTHLY PAYMENT], beginning on [FIRST PAYMENT DATE] and continuing on the same day of each subsequent month until [MATURITY DATE], at which time any remaining balance shall be paid in full. Each payment shall be applied first to accrued interest and then to Principal.{{/when}}{{#when repayment_structure=interest_only}}INTEREST-ONLY WITH BALLOON. Borrower shall make monthly interest-only payments of $[INTEREST PAYMENT] beginning on [FIRST PAYMENT DATE]. The entire unpaid Principal, together with any accrued and unpaid interest, shall be due and payable on [MATURITY DATE].{{/when}}

4. Prepayment

Borrower may prepay all or any portion of the unpaid Principal at any time without penalty. Prepayments shall be applied first to accrued interest and then to Principal.

5. Late Fee

If any payment is not received by Lender within ten (10) days after its due date, Borrower shall pay a late fee equal to the lesser of (a) 5% of the overdue amount, or (b) the maximum late fee permitted by applicable law.

6. Default & Acceleration

Each of the following constitutes an "Event of Default": (a) failure to make any payment when due that remains uncured for fifteen (15) days; (b) Borrower's insolvency, assignment for the benefit of creditors, or filing for bankruptcy; (c) any false or misleading representation made to Lender in connection with this Note. Upon an Event of Default, Lender may, by written notice, declare the entire unpaid Principal and accrued interest immediately due and payable, and may exercise any other remedy available at law or in equity.

7. Security (Optional)

{{#when note_secured=no}}UNSECURED. This Note is unsecured.{{/when}}{{#when note_secured=yes}}SECURED. This Note is secured by the following collateral: {{collateral_description}}. Borrower shall execute any security agreement, UCC-1 financing statement, mortgage, deed of trust, or other document reasonably required by Lender to perfect Lender's security interest. Upon an Event of Default, Lender may pursue all rights and remedies of a secured party under applicable law.{{/when}}

8. Collection Costs

If this Note is placed in the hands of an attorney for collection, or if Lender otherwise incurs costs in collecting this Note (including bankruptcy proceedings), Borrower shall pay Lender's reasonable attorneys' fees and costs, in addition to all other amounts due.

9. Waiver

Borrower waives presentment, demand, notice of dishonor, notice of acceleration, and protest. No delay or omission by Lender in exercising any right shall operate as a waiver of that or any other right.

10. Governing Law

This Note shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to its conflict-of-laws principles.

11. Miscellaneous

This Note constitutes the entire agreement between the parties regarding the loan and supersedes all prior discussions. Any amendment must be in writing and signed by both parties. If any provision is held unenforceable, the remaining provisions shall continue in full force. This Note is binding upon Borrower's heirs, successors, and assigns, and inures to the benefit of Lender's heirs, successors, and assigns.

IN WITNESS WHEREOF, Borrower has executed this Promissory Note as of [DATE].

BORROWER
Signature: __________________________
Printed Name: [BORROWER NAME]
Date: ______________

ACKNOWLEDGED:
LENDER
Signature: __________________________
Printed Name: [LENDER NAME]
Date: ______________

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