Promissory Note for Personal Loan / Business Loan

 Promissory Note Form

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U.S.Legal Forms, Inc., offers Promissory Note forms for all States. Unsecured, secured and special matter notes. State Specific Notes. Notes with interest, without interest, payable on demand, in installments and lump sum.



A promissory note is a written promise to pay a debt. An unconditional promise to pay on demand or at a fixed or determined future time a particular sum of money to or to the order of a specified person or to the bearer.

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Overview FAQ

Promissory Note - Why Not Using One is Foolish

Not using a promissory note can be a costly mistake. If you're thinking about making a loan for personal reasons or business loan, it's essential to put the terms in writing to minimize the chances you could have a future disagreement or wind up in court. Even when you completely the trust the other party to repay a personal loan or loan for business purposes, an oral agreement can be an invitation for trouble. When an oral agreement rather than a written promissory note form is used, there can be misunderstandings about the interpretation of the terms, or a conflict due to fading memory over time. If you've ever played the telephone game, you know that something said can change drastically from ear to ear even without a passage of time. Therefore, a promissory note template can avoid such differences and misunderstandings over terms of a loan agreement by clearly defining the important details, like interest rate, late payment penalties, and payment timeframes. A written promissory note provides concrete evidence of the loan terms if a question ever arises.


Types of Promissory Notes

A variety of sample note forms can be used. Some examples include:


Balloon note - A balloon note provides for smaller installment payments in the beginning and a larger payment toward the end of the loan term.

Demand note - This type of promissory note form requires payment in full upon a demand by the lending party. There is no fixed timetable for repayment. The borrower may have an option to pay before demand is made. It differs from an installment note, in which payments are made at regular intervals.

Secured or unsecured promissory note - Notes payable with a security interest provide for some form of collateral that can be taken by the lender in the case of default in payment. A mortgage loan is a common example of a secured loan.

Master promissory note - This can be used to make a series of loans over an extended time period.


Some people are hesitant to use a promissory note sample when creating a personal loan agreement out of fear that the other party will be offended when requesting a signature be signed on a loan agreement template. However, it may be even more crucial to have a written agreement when dealing with personal loans, since a personal relationship can be damaged when there's a dispute. A business loan may also be easier to collect on than a personal loan. When asking others to sign legal notes, you can preface the request by stating that it's a matter of following business practice, not anything personal. If you are uncomfortable about requesting a signature on a sample promissory note, you can assure the other party that this is just how you conduct business. By using a sample of promissory note to make a loan, you are conducting a business transaction, personal emotion needs to kept separate, business is business.


More Promissory Note Topics

How to Create a Promissory Note

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