Promissory Note Template

What is a promissory note?

Lending money to a relative, a friend or a small business is easier on everyone when the terms are written down. A promissory note is the borrower's written promise to repay: it records the amount, the date, any interest and the repayment schedule, so there is no uncertainty later about what was agreed — and a clear record if either of you, or your estates, ever need to show the loan existed.

This template covers an unsecured loan repaid either in one payment on a set date or in monthly instalments. It sets the interest rate (0% for an interest-free loan), calculated daily and reduced automatically if it is above what the law allows. It says how payments are made and applied, allows early repayment without penalty, and sets a grace period, an optional late fee, and what counts as default — after which the lender may, by written notice, ask for the whole balance. Both the lender and the borrower sign and initial every page.

When to Use a promissory note

• Parents lending an adult child money for a car, a deposit or tuition
• A friend lending money to be repaid in monthly instalments
• A business owner lending money to their own company, or a backer lending to a start-up
• Recording a loan already made so both sides have the same terms in writing
• Relatives lending money where other family members should know it is a loan, not a gift

What You Fill In

17 blanks, then the name and email of each person who signs: lender, borrower.

What the promissory note Covers

1. The loan
2. Interest
3. Repayment
4. Early repayment
5. Late payment and default
6. General

Using the promissory note, step by step

1 Enter the parties and the loan

Add the lender and borrower, the date of the loan, the currency and the amount. Adding what the loan is for is optional but useful later.

2 Set the interest

Enter a yearly rate, or 0 for an interest-free loan. Some places set a maximum lawful rate, and interest-free or very low-rate loans can have tax consequences for larger amounts — check locally if you're unsure.

3 Choose how it will be repaid

Pick one payment and enter the due date, or monthly instalments and enter the instalment amount and first due date. Fill in the fields for the plan you pick — anything left empty prints as a blank line. Later instalments fall on the same day each month, and the last one settles the exact balance. Early repayment is always allowed without penalty. Say how payments are made, for example bank transfer.

4 Set late-payment terms and sign

Choose how many days late a payment can be before it is overdue, and add a late fee if you want one. Enter the governing law, send the note to the borrower, and both of you sign. The signed copy is filed in Files.

Tips Before You Send It

• Keep a record of every payment, and confirm payments to the borrower when asked — the note expects it.
• Make the instalment amount realistic for the borrower's budget; a note that can't be kept to helps no one.
• If you want the loan secured on a car, house or other property, that needs separate security documents and often registration — get advice.
• For a larger interest-free or low-interest family loan, ask a tax adviser whether it has tax implications for either of you.
• If the borrower later falls behind, a payment plan agreement can reset the schedule in writing.

Promissory note: frequently asked questions

More Agreement Templates

All Personal & family templates · Every eSignature template

This template is a general starting point, not legal advice. Laws differ between countries and states — have a lawyer review the agreement for your situation before you rely on it. Page last reviewed 2026-09-29.