Free Promissory Note

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Free Promissory Note

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  3. Just takes 5 minutes

Promissory Note

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Your Promissory Note

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Promissory Note Page of
Page of

PROMISSORY NOTE
(this "Note")


         


         

Borrower:

__________ of ______________________________________ (the "Borrower")

Lender:

__________ of ______________________________________ (the "Lender")

Principal Amount:      $_____________ CAD

  1. FOR VALUE RECEIVED, The Borrower promises to pay to the Lender at such address as may be provided in writing to the Borrower, the principal sum of $_____________ CAD, without interest payable on the unpaid principal, beginning on December 4, 2020.
  2. This Note will be repaid in full on December 4th, 2020.
  3. The Borrower shall be liable for all costs, expenses and expenditures incurred including, without limitation, the complete legal costs of the Lender incurred by enforcing this Note as a result of any default by the Borrower and such costs will be added to the principal then outstanding and shall be due and payable by the Borrower to the Lender immediately upon demand of the Lender.
  4. If any term, covenant, condition or provision of this Note is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Note will in no way be affected, impaired or invalidated as a result.
  5. This Note will be construed in accordance with and governed by the laws of the Province of Alberta.
  6. This Note will enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Borrower and the Lender. The Borrower waives presentment for payment, notice of non-payment, protest and notice of protest.

IN WITNESS WHEREOF the parties have duly affixed their signatures under seal

SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

   


_______________________________
__________

     


SIGNED, SEALED, AND DELIVERED
this ________ day of ________________, ________.

   


_______________________________
__________

     

Promissory Note Information

A Promissory Note is also known as:

  • IOU
  • Notes Payable
  • Demand Note
  • Commercial Paper

What is a Promissory Note?

A Promissory Note is a contract that documents a financial promise between two parties. The borrower (the person who receives a loan) promises to pay back a sum to the lender, outlining when and how they will return the borrowed amount.

People typically use Promissory Notes for loans that come from non-traditional money lenders like individuals or companies instead of banks or credit unions. These short- or long-term loans often help people achieve various personal and business goals.

A Promissory Note includes terms such as:

  • The principal amount, any interest charges, and the final due date
  • Payment dates, penalties for default, and collateral (if any)
  • Contact information for each party (can be an individual or a corporation)

What is a payment default?

A payment default is when a borrower fails to make a payment on time, as per the agreed upon schedule. The lender must decide penalties for payment defaults. For instance, the lender may penalize overdue payments by charging late fees or increasing the interest rate. If a borrower misses too many payments and provided collateral, the lender may take the issue to court and seize the collateral to make up for some or all of the remaining amount due.

How do I create a payment plan?

Your payment plan depends on the size of the loan and the final due date for payment. Lenders commonly allow monthly payments at the beginning or end of the month. Instalments should be affordable for both the borrower and the lender, as payments that are either too high or too low could cause issues for both parties.

LawDepot's Loan Agreement template allows you to choose from the following methods of repayment:

  • Single repayment: The borrower repays the entire loan amount at once (either by a specific date or upon notice to repay).
  • Regular payments: The borrower repays the loan in weekly, monthly, or yearly instalments.
  • Other: Specify a non-traditional method of payment, such as allowing the borrower to make payments as they are able.
  • Early repayment: In addition to the specified payment schedule, the borrower may make lump sum payments at any time in order to repay the loan early.
  • Interest: The lender may charge interest at a certain percentage rate that compounds yearly. If the borrower fails to make a payment on time, the lender may increase the rate of interest or charge a late fee.

When do I need a Promissory Note?

Customize LawDepot’s Promissory Note template to suit a variety of purposes, including:

  • Business loans, such as capital for a startup business
  • Purchases, such as a vehicle, boat, or furniture
  • Real estate loans, such as a down payment on a home
  • Student loans for tuition and other educational expenses
  • Personal lending between friends or family for debts or bills

How do I enforce a Promissory Note?

Send a Demand Letter to the borrower to enforce your Promissory Note in the event of a missed payment or loan default.

If the borrower does not respond, you can take steps such as:

  • Contacting a lawyer and requesting that they provide a letter of collection to the borrower
  • Taking legal action against the borrower
  • Collecting money through a third party, such as a bank or collection agency

Related Documents:

  • Loan Agreement: A loan contract that includes clauses about the entire agreement, additional expenses, and the process for amendments.
  • Bill of Sale: A proof of payment receipt that documents the purchase, sale, and transfer of goods from one person to another.
  • Sales Agreement: A contract that documents a purchase between buyers and sellers.
  • Purchase of Business Agreement: An agreement that transfers the ownership of a business from one party to another.
  • Real Estate Purchase Agreement: A document that outlines the terms of a residential property deal between a seller and buyer.

Frequently Asked Questions:

Promissory Note FAQ
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