ClauseryPromissory note
A short signed promise to repay a loan: who is lending, who is borrowing, the principal, any interest, when it is paid back (lump sum or instalments), and who else is on the hook. Fill in online and download Word or PDF.
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A promissory note is the simplest legally useful loan document: a single signed promise from the borrower to repay the lender on stated terms. It is one page, signed by the borrower, and is enough evidence of the debt for small personal or family loans.
For larger loans with security, guarantors or detailed default provisions, use a full loan agreement instead. If you are charging interest, use the loan repayment calculator to get the instalment right — the rate must usually be stated in writing and cannot exceed local usury limits.
What to include#
- Parties and date. Legal names and addresses of lender and borrower, and the date the note is signed.
- Principal amount. The exact amount lent, in words and figures, and the currency.
- Interest rate (if any). Annual interest rate, how it accrues (simple or compound), and whether there is a grace period before interest starts.
- Repayment terms. Either a lump sum by a fixed date or instalments (monthly is typical) with the amount per payment and the first/last dates.
- Default, late fees and co-signer. What counts as default (typically missing a payment for 30 days), any late fee, and an optional co-signer who becomes liable if the borrower defaults.
How to fill it in#
Step 1: Decide lump sum or instalments
For small short-term loans a single repayment date is simpler. For longer terms set a monthly amount — calculate it first to be sure it is affordable.
Step 2: Set interest (or not)
No interest is common for family loans, but some jurisdictions treat large interest-free loans as gifts. Check gift-tax and imputed-interest rules.
Step 3: Name the parties and dates clearly
Use full legal names (not nicknames) and full addresses. State the date the money is lent and the first repayment date.
Step 4: Add a co-signer if needed
If the borrower has thin credit a co-signer strengthens the note. Co-signers should understand they are fully liable for the balance.
Step 5: Sign and date, borrower keeps a copy
The borrower signs and dates; the lender holds the signed original until repayment, then marks it "paid in full" and returns a copy.
Related templates and guides
Questions
Is a promissory note legally binding?
Yes, once signed by the borrower it is a written promise to pay and can be enforced in court if the borrower defaults, subject to local contract and usury laws.
Does it need to be notarised?
Generally no — a signed and dated note is enforceable without notarisation in most jurisdictions. Notarisation can help prove the signature is genuine in a dispute.
What is a reasonable interest rate?
Check your state/country's usury cap. Rates above that are often unenforceable and can carry penalties. For family loans many people use the IRS Applicable Federal Rate (US) or similar.
Does the lender also sign?
Not required — the note is the borrower's promise — but many people have both parties sign for clarity.
Can I secure the note against property?
You can, but a secured loan is usually better documented with a full loan agreement and a recorded security instrument (for example a UCC filing in the US, a mortgage for real estate).
These are general templates, not legal or tax advice. Have anything unusual reviewed for your jurisdiction.