Promissory Note Template
Lending money to family or a friend rarely stays simple without paperwork. Amount, interest, repayment dates — put them on paper with a promissory note template so both sides know the deal.
Customize & DownloadPromissory Note Template Sample
FOR VALUE RECEIVED, [1. Borrower Full Name] (the “Borrower”) promises to pay to [2. Lender Full Name] (the “Lender”) the principal sum of [3. Principal Amount], together with interest, in accordance with the terms of this Promissory Note.
1. Interest.
The principal shall bear interest at the rate of [4. Interest Rate] percent per annum, calculated on the unpaid principal balance. The parties acknowledge that this rate does not exceed the maximum rate permitted by the law of the State of [5. State].
2. Payment Schedule.
The Borrower shall repay the principal and interest in [6. Payment Frequency] installments of [7. Installment Amount] each, beginning on [8. First Payment Date] and continuing until the balance is paid in full. The final payment shall be due on [9. Final Payment Date] and shall include any remaining principal and accrued interest. All payments shall be applied first to accrued interest and then to principal.
3. Prepayment.
The Borrower may prepay all or part of the outstanding balance at any time without penalty. Any prepayment shall be applied to principal after accrued interest is satisfied.
4. Default.
The Borrower shall be in default if any payment is not made within [10. Grace Period] days of its due date. Upon default, the entire unpaid principal and accrued interest shall become immediately due and payable at the Lender’s election.
5. Security.
This Note is [11. Secured or Unsecured]. If secured, the Note is secured by [12. Collateral Description], and the Lender may enforce its rights in the collateral in accordance with applicable law.
6. Remedies and Costs.
Upon default, the Lender may pursue all remedies available at law or in equity, including the collection of reasonable attorney’s fees and costs incurred in enforcing this Note.
7. Governing Law.
This Note shall be governed by the laws of the State of [5. State]. This Note is non-negotiable and may not be transferred or assigned without the prior written consent of the Borrower, except to the Lender’s heirs or assigns.
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What's Included
6 provisionsThis template is provided for informational purposes only and is not legal advice. State usury limits vary; confirm your interest rate complies with local law before lending.
How to Use
Generate the current form
The note follows 2026 lending practice and the Uniform Commercial Code structure for simple loans.
Enter the loan terms
Add the borrower, lender, amount, interest rate, payment schedule, and whether the note is secured.
Preview and download
Review the completed note and export it as Word or PDF for both parties to keep.
Frequently Asked Questions
What interest rate can I charge on a promissory note?
The legal maximum varies by state — the usury limit. Rates above that cap can be unenforceable, so check your state's limit before setting the rate.
What is the difference between secured and unsecured?
A secured note is backed by collateral the lender can claim on default. An unsecured note has no collateral, so the lender must pursue collection through courts.
Can I charge interest to a family member?
Yes, but the IRS has minimum rates for family loans. Below-market loans can create imputed interest and gift tax implications above certain thresholds.
What happens if the borrower does not pay?
After the grace period, the note typically allows the full balance to become due immediately. The lender can then pursue collection, including court judgment and wage garnishment.
