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Promissory Note Form: What Needs to Be Included
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Are you planning, in the very near future, to sell a large or expensive item to someone on credit, or perhaps thinking about loaning cash to a friend, colleague or family member? Do you require a promissory note form to outline the details of this financial transaction—one that will protect you against the potential of default? If you do, there are several options at your disposal for creating or borrowing this type of document. To give you a few ideas, in this article we will explain some of the methods for obtaining one of these samples, followed by a comprehensive list of topics that should always be addressed in any type of sample promissory note form.
Methods for Finding or Creating a Promissory Note Form
A sample promissory note form can save you a lot of time in the long run, especially if this is a type of document you intend to use regularly within the course of your business. Aside from saving you time, the proper promissory note form will also help to ensure that the document you create, using the template as a guide, will contain all the necessary elements that are required to make the contract legally binding. This feature can be particularly valuable when and if the unfortunate happens and the contract is breached.
So how do you go about obtaining free promissory note forms? Below are just a few suggestions:
• Ask a friend. If you have a friend, neighbor, colleague or family member who has previously drafted (or had drafted for them) a promissory note form, ask them if you can borrow it for a time to create your own template. This is a very easy process, one which requires you to merely change some of the names and other specifics as they relate to your proposed transaction.
• The Internet. These days, as the popularity of the Internet grows, more and more websites have sprung up offering a wide array of business and financial documents, including a number of sites on which you can borrow a blank promissory note form—free promissory note forms that can quickly and easily be adapted to suit your intended purpose.
• Create an Excel Promissory Note Form. If you are unable to locate the exact type of blank promissory note form you need on the Internet, you may want to create an Excel promissory note form instead—one made using Microsoft’s impressive spreadsheet program. Excel makes it simple to create these documents, with tutorials that walk you through every stage of the process. In Excel, not only can you enter text and numerical data, you can also create formulas that will calculate items such as the remaining balance on the contract after each payment, as well as the appropriate percentage of interest owed based on that new balance.
The Promissory Note Form: What to Include
Whether you borrow free promissory note forms from a friend or the Internet, or opt to create your own Excel promissory note form, there are several items of information that must be included. These items are listed below, each of which is equally important in ensuring that the final document you create is legal and binding according to the laws in your state or municipality.
• Lender Information. As the lender, it is imperative you include all of your personal and contact information on the sample promissory note form, including name, address, phone and email address. This shows you are making yourself available should the borrower have further questions or concerns regarding the terms of the transaction.
• Borrower Information. Because the promissory note is a legally binding document it’s crucial that you verify the personal and geographical details of the borrower—even if that borrower is a friend. This may seem awkward, but it can help avoid any potential problems down the road should the original arrangement not be honored.
• Amount Borrowed and Payment Details. A blank promissory note form should contain the required fields to indicate the total amount being borrowed and the payment details. The manner in which the money will be repaid is entirely up to you. However, whether you opt for weekly, monthly or quarterly payments or even a lump sum repayment on a specific future date, this information needs to be clearly stated in the contract.
• Interest. If you plan to charge interest as part of the agreement, it needs to be clearly defined in your sample promissory note form (If you use Excel, the program will perform these calculations for you).
The final portion of the promissory note form should highlight the consequences for late payments or complete default on the loan. This section will be followed by the “signature” and “date” spaces for both the lender and the borrower, and an additional space on which the document can be witnessed or notarized by a practicing Notary Public.
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