Promissory notes are easy to understand even without any prior legal knowledge. Here is a step-by-step guide to filling a promissory note template.
Step 1: Lender and borrower
Enter the day month and year followed by the name of the borrower and lender. Next, go on to mention the mailing addresses of both parties. Ensure that the lender fills in the loan amount in numbers and words. Write In the annual interest rate percentage.
Step 2: Payments
Enter the due date for the loan repayment by mentioning the day, month and year. Next, you need to choose whether the loan is going to be repaid lump-sum or in installments. Check the desired option. If you go in for the latter option, you need to fill in a late fee if a borrower fails to make the repayment on time.
Step 3: Secure or Unsecure
If you are a lender, it is recommended that you select Secure in the promissory note. Pawn-shop owners mainly use this method. If you are planning on loaning money to an individual or business, choose Unsecure. Note that you need to trust your borrower enough if you are issuing an unsecure promissory note.
Step 4: Co-signer
In the event that the original borrower fails to repay the loan, a co-signer must shoulder the responsibility of making the repayment. In the absence of collaterals, co-signers possess an Unsecure promissory note. Borrowers who place a collateral need not have a co-signer.
Step 5: Governing law
Fill in the state whose jurisdiction your note falls under. You must also enter the condition of the lending individual or business.
Step 6: Signatures
The promissory note must be authorised with a signature by the lender, the borrower as well as a witness. If there is a co-signer, the said individual must be present as well. Ensure that the involved parties fill in the form with their names, date and their signatures.