Promissory Note Template

All states
Promissory Note Page 1
4.6 (29 reviews)
Updated May 11, 2024
~ 6 pages
A promissory note is a written promise to pay a specific amount within a specific timeframe. Both parties must sign this document to guarantee the borrower will repay the lender on that date. Tailor this promissory note form to your situation and download it in PDF within minutes.
Paper titled "Promissory Note"; man and woman shaking hands at the desk

Promissory notes are promises to pay a specific amount within a specific timeframe. Both parties must sign this document to guarantee the borrower will repay the lender on that date. Whether between individuals or between entities, a promissory note records a loan. Simple promissory notes ensure clarity about due dates for payments and payment amounts by putting all relevant details in writing.

When to Use a Promissory Note

Standard promissory notes are helpful when:

  • A business transaction results in someone or an organization owing money.
  • If you need to repay a sum of money (a debt), you must create a legally enforceable contract.
  • There is an organization that owes money to you.
  • Payments begin and end at fixed dates, and the repayment amount is inevitable.

A promissory note form will ensure that the debtor will repay. It is legally binding on the party owing the money and records the transaction.


  • Maker — This refers to the individual or entity that promises to pay a certain sum of money to the payee under the terms outlined in the promissory note. The maker is essentially the borrower in the promise to pay agreement, assuming the obligation to repay the agreed amount within the specified time frame.

  • Payee — The payee is the individual or entity to whom the maker is indebted under the terms of the promissory note. This party is poised to receive payment from the maker per the amount and repayment schedule stipulated in the note. The payee may also be referred to as the lender or the holder of the note, especially if the note is negotiated or endorsed by a third party.

Key Terms

  • Principal Amount — This is the original sum of money being borrowed as specified in the promissory note or as seen in a promissory note template. It does not include any interest or fees.
  • Interest Rate — The cost of borrowing, expressed as a percentage of the principal amount. The lender charges the borrower this rate in exchange for using the lender's funds.
  • Maturity Date — The specified date by which the borrower is expected to repay the loan in full. You can find this term in a promissory note example. This includes both the principal amount and any accumulated interest.
  • Default — This occurs if the borrower fails to repay the loan within the agreed repayment schedule. The promissory note outlines the consequences of default, which can include penalties or legal action.
  • Security/Collateral — An asset or property the borrower offers to secure the loan. If the borrower defaults on the promissory note, the lender has the right to seize the collateral to recoup the borrowed funds. Often, examples of how to structure this term can be found in a promissory note sample.

How to Write a Promissory Note

You do not need to spend much time preparing a promissory note, but you must be very careful when completing it. If you need to consult a local lawyer and check county and state requirements, you can use our simple promissory note sample to create a legal document that is as comprehensive as possible.

Here is a step-by-step guide on how to write the forms promissory note:

  1. Identify the parties — Start by clearly stating the names of the payee (the lender) and the maker (the borrower). Include their complete addresses to avoid any kind of confusion.

  2. State the principal amount — Clearly specify the exact sum of money that is being loaned. This is known as the principal amount.

  3. Determine and record the interest rate — If the note includes an interest rate, be sure to include the exact annual percentage rate. The borrower is required to pay this rate in addition to the principal amount.

  4. Define the repayment terms — Describe the repayment plan in detail. This includes the number, amount, and frequency of payments.

  5. Set a maturity date — The maturity date is when the total amount of the loan should be paid back to the lender. List this clearly in the note.

  6. Specify default terms — Describe what happens if payments are not made as agreed. This could include late fees, a higher interest rate, or full payment of the balance.

  7. Include a signatory clause — The document should note that it is agreed upon and legally binding.

  8. Signatures of both parties — The note must be signed and dated, affirming their agreement to the terms and conditions listed.

Borrowing parties are required to adhere strictly to the terms of the note, repaying the borrowed sum within the agreed timeline or risk additional fees. Upon complete repayment of the loan, the lending party customarily issues a loan release form, absolving the borrower of any further obligations related to the loan.

In the event of payment failure, the lending party should promptly issue a demand letter enumerating the consequences stipulated in the blank promissory note, such as late-payment penalties and the grace period before default. In cases of extensive default, lenders can seek restitution through Small Claims Court, provided the value is $10,000 or less, or resort to legal action for more substantial claims. If the promissory note is secured, possession of the property or asset designated as collateral is turned over to the borrower upon full settlement.

To simplify this process and possibly avoid substantial legal fees, employing a well-structured free promissory note template proves valuable. A promissory note template guides you through the process, assisting you in correctly filling out all essential details. This approach ensures an accurate and legally binding document. Moreover, choice templates usually come in a flexible format, like a promissory note PDF, making access and revision straightforward. This judicious method is undoubtedly an intelligent option for vigilant borrowers and lenders alike.

Also Read

Frequently Asked Questions

Where to get a promissory note?

Promissory notes don’t have any legal requirements, and some people write them themselves for simple purposes. To get started, you can use our printable promissory note template. To ensure the note contains all essential elements and is compliant with local laws, you should work with a professional document preparer, such as Lawrina.

When are promissory notes used?

There are many types of promissory notes, varying in formality and amount. Student loans and personal loans can both be financed with promissory notes, which serve as a legal record of the borrowed amount and protect the lender if the borrower doesn’t make payments.

How do I write a promissory note?

Although promissory notes are often simple, they should include the names and addresses of the lender and borrower. This legal document should include the amount borrowed, collateral details, payment terms, and signatures of both parties. Your promissory note should also include interest rates and amortization schedules, along with payment amounts and dates. Please contact your local attorney or law firm for assistance in drafting your promissory note.