Personal Promissory Note

A Personal Promissory Note is the one used between two parties like friends and family members on a small level with a small amount of loan. As compared to commercial and other types of business related promissory notes, a personal promissory note is not used by people commonly because people usually feel shy in creating some legal documents for personal loans. There is no need to feel shy or unpleasant because a promissory note is just used to eliminate misunderstanding and is good enough for your good relation. A personal promissory note becomes legally bound if and only if both the parties sign the note. The usages of personal promissory note are quite limited as it is only used for two parties on a small level and small amount of loan but unfortunately is very rarely use because the lender feels shy in making a promissory note as sometime borrower consider the promissory note as an insult that his/her friend or family member has no trust in the browser.

The Personal Promissory Notes are often used by two individuals who know each other and therefore usually they are free from any kind of interest rates. The details of such notes are based on information about the borrower and lender, the total amount of loan, date of the promissory note, the interest rate if any and the date of return of the loan. The purpose of the personal promissory note is just a protection that makes the lender able to sue the borrower in case of any differences regarding the agreement.

A Sample Personal Promissory Note

I ___________ (borrower) agree to repay to____________ (lender) _______________ (amount – spelled out) for lending me said funds for ___________________ (state your purpose for the loan.)
The terms of the Loan: 
1.___________________ (Amount you have to pay per month)
2. ___________________ (The interest rate charged by the lender, write zero if there is no interest rate).
3. _________________ (Date when the loan must be fully repaid).
4. ___________________ (what happens if there is a late payment, bounced checks, etc., the fee?)
5. ___________________ (any other terms of the loan you want to add.)

Both the parties agree to the terms stated here. The terms may not be modified without the mutual consent of the parties.
Signed by the County of _________ (borrower’s county) in the state of ______ (borrower’s state) on this _____ (day) day of _______ (month), ______ (year).

your full name and signature

Lender’s name and signature

How to write a personal promissory note

There are a number of templates available on the internet for personal promissory note; however it is good to create a one that suits your requirements.

  • Start the personal promissory note with the full name of the borrower you can also mention the residence and contact information, then write your own name as a lender, mention the loan amount and date with complete information like day, month and year.
  • Clearly include the terms of the promissory note like payment method, mode, rate of interest, due date and other.
  • End the promissory note with the signatures of both parties.

Related Notes

  • Secured Promissory Note Sample This type of note is a written document that is backed by a property as a collateral or security for the loan amount. In a secured promissory note, it is stated that if the borrower is failing to repay the loan amount on the due date, the lender will then take your property. There are many lenders who never pay the loan amount without any security and is usually used in commercial or real estate loans. Secured promissory a bit stressing on the part of the borrower because if due to […]
  • Unsecured Promissory Note As the name implies an unsecured promissory note is a promissory note in which a borrower doesn't have to put something that is equal to the value of the loan amount as collateral such as car, house or any other type of property. An unsecured promissory note has also a legal value and one party can sue the other party in court in case of violation of the terms.  Unsecured promissory notes, like simple and personal promissory notes are common for loans in which the parties, the lender […]
  • Simple Promissory Note A simple promissory note is a loan document that shows an agreement between two parties and bounding the lender and the borrower legally. A simple promissory note is based on a number of details of the loan such as the amount of the loan, the names of both the parties, contact information of the parties, applied interest rate and a specific date or due date on which the borrower has to pay back the loan amount to the lender. The purpose of adding a list of information in a simple […]
  • Payment Promissory Note Payment notes are also known as notes payable are a type of contract or agreement that comes into existence between two parties when one party receive a loan from another party for a specific period of time with a due date and with a specific amount of interest rate charged on it annually. Payment notes that are based on a period of one year or less are known as short payment notes while those having a period greater than one year are considered long term payment notes. Payment notes […]
  • Demand Promissory Note A demand note is a type of promissory note or loan note without any specified time for the repayment of the loan and is held by the lender that he can use it any time and call the borrower for the repayment of a loan.  These notes are provided by the lender in a flexible manner and usually based on a long term in which the lender never asks for the repayment of the loan to borrower unless he needs his money. When the demand notes are created by the loan parties, there is no kind of […]