Lending sounds a very risky business! A party who acts as a lender should protect the assets with a certain legal document. There are many of it that you can learn from, such as the blank promissory note.
There are many types of blank promissory note template that you can download for free on this page. It comes in various formats and you can edit it as you like. Besides, in this article, you will learn further about how to use this template.
What Is A Promissory Note?
In the lending business, the promissory note acts as a financial instrument. This document contains promises of a party that is from the issuer. This party is making a promise to pay another party a sum of money. Typically, the document consists of several aspects such as maturity date, principal amount, place of issuance, interest rate and many more.
By using this document, an individual or a company can get financed from various sources other than banks. The source can be in many types. This can be the company or individual who is willing to carry it with terms agreed upon.
How To Write A Promissory Note?
Even though most promissory notes are written by the lenders, banks and also attorneys, this can lead to a problem when it is not written properly. On this page, you will find various templates such as fill in the blank promissory note. You can learn the basic structure from this template or simply use it for drafting.
The following is a guide on how to make the promissory note properly:
- The first step is to write the promissory note date. This is crucial to ease everyone who read this document figuring out when the document is made.
- Write down the registered note numbers. You need to write down clearly the amount of loan in a numeric value and also the long-form.
- The next step is describing the note terms. The terms need to detail how the borrower should repay the loan. Maybe you want it to be monthly, weekly or quarterly. Set the deadline for the payment from the date, month and year. Besides, don’t forget to indicate the final payment on this document.
- Interest rate. It is the same with the interest rate, you need to write down the numeric value along with the percentage of the interest rate. Write it down in the numeric value and the long-form.
- The document also should state other details whether this is a secured or unsecured loan. If the borrower will use the collateral to secure it, then you have to describe it on the document. For example, the borrower will use commercial property to secure the loan. State in detail description from the property address, until the building description.
- The next step is writing the complete name of the lender and borrower with the complete detail such as mailing addresses for the payment case.
- The borrower should sign the agreement to acknowledge the obligation.
Tips In Writing A Promissory Note
If there is more than one borrower, you have to ensure each of them sign and print the document. Otherwise, you only can pursue the person who is in the agreement.