Promissory note template
A promissory note is the borrower's written promise to repay a loan: how much, at what interest, on what schedule, and what happens if payments stop. This template covers an unsecured loan repaid in installments or in one payment, with a late fee, early payoff and default terms. Read it below, then fill in the numbers and send it to the borrower to sign.
Updated November 5, 2026 · 4 min read
The contract
Gray blanks are yours to fill in before you send. Each signer fills in the blanks in their color.
- You, before sending
- Borrower
- Lender
Promissory Note
Principal amount: Principal amount. Date: Note date.
1. Promise to pay
For value received, Borrower name, of Borrower address (the "Borrower"), promises to pay Lender name, of Lender address (the "Lender"), the principal amount above, plus interest as set out below. The Borrower confirms that the Lender paid the principal to the Borrower on or before the date of this Note.
2. Interest
Interest accrues on the unpaid principal at a simple rate of Interest rate percent per year, starting on the date of this Note. If the rate is zero, no interest accrues except as provided in section 6. In no case will the interest charged exceed the highest rate the law allows; any excess paid will be applied to principal or refunded.
3. Repayment
The Borrower will repay this Note as follows: Installment amount per month, beginning on First payment date and on the same day of each month after that, until the whole balance of principal and interest is paid. In any case, all unpaid principal and interest are due on Maturity date (the "Maturity Date"). For a single-payment loan, enter no installment amount; the whole balance is then due on the Maturity Date.
4. How payments are made and applied
Payments will be made by Payment method, or another way the Lender agrees to in writing. Each payment is applied first to any late fee, then to accrued interest, then to principal. The Lender will give the Borrower a written statement of the balance on request.
5. Late fee
If any payment is more than Grace period in days days late, the Borrower will pay a one-time late fee of Late fee for that payment, to the extent the law allows.
6. Default and acceleration
The Borrower is in default if a payment is not made within Days late before default days of its due date, or if the Borrower files for bankruptcy. On a missed payment, the Lender will send the Borrower written notice and give the Borrower Cure period in days days to catch up. If the Borrower does not, the Lender may declare the whole unpaid balance due at once. After that, the unpaid balance accrues interest at the rate in section 2, or, if that rate is zero, at the legal rate for judgments in the state named in section 9.
7. Early payment
The Borrower may pay all or part of this Note early at any time without penalty. Early partial payments reduce the principal but do not change the amount or dates of later installments unless the Lender agrees in writing.
8. Collection costs and waivers
If the Lender has to take legal action to collect after a default, the Borrower will pay the Lender's reasonable collection costs and attorney fees, as the law allows. The Lender's delay in enforcing any right is not a waiver of it. The Borrower waives presentment, demand for payment and notice of dishonor, except the notice in section 6.
9. General terms
This Note is unsecured. It is governed by the laws of the state of State. If any part is unenforceable, the rest remains in effect. It can be changed only in writing signed by the Borrower and the Lender, and may be signed electronically. When the Note is paid in full, the Lender will give the Borrower a written release.
Borrower phone: Borrower phone
I have read this Note, including the default and acceleration terms in section 6, and I promise to repay the loan as it says.
Borrower
Lender (confirming the loan was paid to the Borrower)
Opens it in SignMaster as a template you can edit and send.
A starting point, not legal advice. Have a lawyer review it for your state and situation.
On this page
Promissory note or loan agreement?
A promissory note is short and one-sided: the borrower promises to pay, and the lender has already handed over the money. A personal loan agreement is a two-way contract that also covers when the lender releases the money, what it's for and any collateral. For a simple loan between people who trust each other, a note is often enough. For a larger loan, staged payouts or anything secured, use the agreement, or both.
Typical uses: a loan to a relative or friend, an owner lending money to their own company, a buyer paying a seller over time for a used truck or equipment, or a business customer paying off an overdue balance on a schedule.
What the template covers
- Parties and principal: the borrower, the lender, the amount borrowed and the date it was received.
- Interest: an annual simple interest rate, or none, and a cap at the highest rate the law allows.
- Repayment: equal monthly installments from a first payment date, or one payment by a maturity date.
- How to pay: bank transfer, check or another method, with payments applied to fees, then interest, then principal.
- Late fee: a flat fee after a grace period.
- Early payoff: allowed at any time, with no penalty.
- Default and acceleration: a missed payment, written notice and a cure period, after which the whole balance can be called due.
- Collection costs and governing law, then the borrower's and lender's signatures.
Mistakes to avoid
- Charging more interest than the law allows. Every state sets its own usury limit, and some cancel the interest, or worse, if you go over.
- Going interest-free on a large family loan without checking taxes. The IRS can treat a below-market loan as partly a gift and impute interest, using the applicable federal rate as the benchmark.
- No real schedule. "Pay me back when you can" isn't a plan anyone can enforce; give a date for every payment, or at least a final maturity date.
- Calling the whole balance due without warning. A written notice and a chance to catch up are fairer, and make a court more comfortable enforcing the note.
- Losing track of payments. Keep a simple ledger, and give a signed release when the note is paid off.
E-signing a promissory note
For most private loans, an e-signed note is a written promise to pay that you can enforce like any contract. The difference is negotiability: ESIGN and UETA leave Article 3 of the Uniform Commercial Code, the law of negotiable instruments, to its own rules, so a note you plan to sell or pledge to a bank may need a paper original. See can you e-sign a loan agreement.
How to send it with SignMaster
- 1
Open the template
Choose Use this template above. The borrower signs first, and the lender signs after to confirm the money was handed over.
- 2
Fill in the loan terms
Type the principal, rate, installment amount, first payment date and maturity date into the gray blanks. Check that the installments actually repay the loan with its interest.
- 3
Send it to the borrower
They fill in their address and phone, tick that they understand the default terms, and sign on any phone or computer with no account.
- 4
Countersign and keep it
The lender signs last. The certificate of completion shows when each of you signed, and the PDF's fingerprint shows the terms weren't edited later.
- 5
Release it when it's paid
When the last payment lands, send the borrower a short signed release, so they have proof the debt is gone.
Every gray blank belongs to the lender, who fills in the loan terms before sending. The borrower adds only their address and phone, ticks the box and signs, so there's no back-and-forth over numbers inside the document itself.
Questions? Answers.
Does a promissory note need to be notarized?
Usually not. A signed note is enforceable without a notary in most situations. Notarization may be needed when the note goes with a mortgage or deed of trust that gets recorded.
What interest rate can I charge on a personal loan?
Up to your state's usury limit, which varies widely and has exceptions. For family loans, compare the rate with the IRS's applicable federal rate to avoid imputed interest.
What happens if the borrower stops paying?
Under this note, the lender sends written notice, waits out the cure period, and can then call the whole balance due. Small claims court or a lawyer is the next step, with the signed note as the key evidence.
Is an unsecured promissory note enforceable?
Yes. Unsecured means no collateral backs it: the lender can sue on the debt, but can't take a specific asset without a court judgment.
Sources
- 26 U.S.C. § 7872, treatment of loans with below-market interest rates · law.cornell.edu
- IRS, applicable federal rates · irs.gov
- 15 U.S.C. § 7003, ESIGN Act exceptions (govinfo) · govinfo.gov