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Loan Agreement Fill out the template

Loan Agreement

Last revision
Last revision 08/25/2017
Formats
Formats Word and PDF
Size
Size 2 to 3 pages
Fill out the template

About the template

Last revision:08/25/2017

Size:2 to 3 pages

Available formats:Word and PDF

Fill out the template

Loan Agreement

A Promissory Note is a written promise to pay money to someone. Its primary function is to serve as written evidence of the amount of a debt and the terms under which it will be repaid, including the rate of interest (if any). Promissory notes may also be referred to as loan agreements, IOUs, or payment arrangements. The note serves as a legal document that is enforceable in court creating an obligation for the borrower to repay the loan.Use this Promissory Note template to lend or borrow money. Promissory notes are used for mortgages, student loans, car loans, business loans, and personal loans between family and friends.

 

How to Use this Document

This Note sets out all of the terms and details of the loan, including the names and addresses of the borrower and lender, the amount of money being borrowed, how often payments will be made, the amount of the payments, and the signatures of the parties.

You can choose from several types of loans accessible within this form.

  • Installment Loan. The borrower pays off the loan, plus interest (if any), by making payments over a set period of time, such as annually, monthly, or weekly.
  • Lump Sum Payment. The borrower pays off the money borrowed, plus interest (if any), in one single payment due on a pre-agreed upon date
  • Due on Demand. The borrower pays off the money borrowed, plus interest (if any), in a single payment due at the time the Lender requests it.

You can also specify whether or not interest will accrue on the loan and, if so, the interest rate that will be used. You also have the option of including provisions to govern early payments as well as an acceleration clause that would cause the entirety of the loan to come due in the event of late payments or non-payment according to the agreed upon payment plan schedule.

If the lender and the borrower decide to change the terms of the promissory note, use an Agreement to Modify Promissory Note form. Once the loan has been full repaid, complete a Release of Promissory Note form.

 

Applicable Law

Promissory Notes are governed by Article III of the Uniform Commercial Code (the "UCC").

There are a number of essential elements that must be present in order for your Promissory Note to be enforceable in a court of law.

  • A Promissory Note must be in writing so that a court can refer to the written record.
  • The Note must be a promise to pay money.
  • The borrower's payment cannot be dependent on an event or other possibility or contingency. The promise of payment must be unconditional. If payment is conditional upon some other event occurring, it is not an enforceable Promissory Note.
  • The Note must indicate a specific amount of money that will be paid. This does not apply to an interest that may be required. If a Note specifies an interest rate but does not include a dollar amount, it is still valid.
  • The borrower must sign the note. It is ideal, though not required, that the lender sign the note as well.

 

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