Even lending money to friends and family members can become complicated if the transaction has not been documented and unexpected problems arise. Filling out a simple promissory note form will provide both parties with a record of the loan and help to prevent misunderstandings later on.
Whenever you are lending money to someone else, a promissory note is a proper way to establish a record of the deal and to formalize the agreement. FORMBLITZ offers promissory note templates, that have been written by skilled attorneys, considering the Uniform Commercial Code. The promissory note samples are easy to fill in and are available for immediate download. No matter if you reside in Utah or Miami, you can download a suitable promissory note template, because FORMBLITZ is offering them for every single American state as PDF and Doc file.
The promissory note form includes a specific promise to pay back the borrowed sum, whereas an IOU just acknowledges the existence of a debt. A loan agreement, on the other hand, includes explicit lender´s rights, such as foreclosure in the event of default. If you consider the legal enforceability, the promissory note lies between an IOU and a loan agreement.
Similar to loan agreements, a promissory note obliges you to pay back a sum of money at a certain date at a specific interest rate. But the loan agreement contains more extensive clauses than the promissory note. Unlike a loan agreement, the promissory note only has to be signed by the borrower. The promissory note does not commit the lender to anything, whereas the loan agreement pledges both, the lender and the borrower, to fulfill the promises and conditions of the agreement.
A loan agreement and a promissory note are both legally binding and the lender has the right to go to court in the event of default.
The promissory note template offered by FORMBLITZ contains all relevant terms. The borrowed sum (plus interest rate) has to be repaid in monthly installments.
One word to the interest rate: The interest rate is limited by the state law to avoid usury and to protect customers. The maximum interest rate may differ from state to state.
Usually, the payee keeps the promissory note until the whole sum is repaid. When the debt has been discharged, it must be returned to the issuer.
By downloading and using a FORMBLITZ promissory note template you can make your loan legally secure. Just fill in and sign it.