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Download promissory note form in Microsoft Word format.
The Promissory Note Form Explained
Have you been actively searching for a promissory note form that you can use for an upcoming loan or business transaction? Would you be interested in downloading one of these loan forms from the Internet, perhaps even for free? If so, the following information may be very useful to you. In this article we will briefly describe what a promissory note is and why you need one, along with some of the typical items that usually appear on these legally binding notes.
What Is a Promissory Note?
Generally speaking, a promissory note is an agreement between two parties: a debtor—or the party that owes the money—and the lender—or the person, business or organization to whom that debt is owed. Therefore, a promissory note can best be described as a written acknowledgement of debt, coupled with a carefully written plan for how that debt will be repaid and an unconditional promise to repay that debt over a specified period of time. These notes are often also referred to as loan agreements or personal loan agreements, however, they should not be confused with IOUs, as IOUs have no official language included which specifies how and when the debt will be repaid.
Promissory Note Form: A Few Common Types
There are literally hundreds of promissory note forms available online that meet all the legal requirements and contain all the necessary language to make your transaction binding under the law, however, not all promissory notes all the same. Below are just a few examples of the different types of notes:
- Demand Promissory Notes
- Installment Agreements
- Installment Agreements with a Final Balloon Payment
- Secured Promissory Notes
- Employer Loan Agreements
- And More...
The type of promissory note form you will need will depend primarily on the type of loan you are extending and the terms of repayment that best suit your unique situation.
Promissory Notes: A Word about Interest Charges
A promissory note can also contain interest charges, but before you assign an interest rate to the loan you are extending, you definitely need to be aware of the usury laws in the particular state or country in which you live. These usury laws carefully spell out the maximum amount of interest you are allowed to charge, and exceeding these maximum limits is considered criminal under the law, with punishments ranging from hefty monetary fines to even jail time.
Promissory Notes: Secured Versus Unsecured
Last but not least, when you’re searching for the type of promissory note form you will need to legitimize your transaction, you must first decide whether the loan will be secured or unsecured, as this will affect the language of the contract in terms of the consequences of a default by the debtor. Secured loans are those types which require some type of collateral from the debtor—collateral that will change hands if the debtor defaults on the loan—while unsecured loans require no collateral, making them much more risky to the lender.