Carl Glendon

Promissory Note - What Are The Top Benefits?

A specific type of debt instrument, the promissory note is a written promise that is made between two parties, where one states that he will pay a specific sum of money to the other one at a particular time or date.

It is actually a financial instrument that has a written promise. You can find printable blank promissory note templates online, which can be customized and used for specific requirements after being downloaded. Read and find out about some of the most important benefits of this kind of a note.

Includes all the important terms regarding the promise of payment

It includes all the vital terms related to the promise such as the principle sum of money, the rate of interest on the same, the date of maturity of the amount, the date on which the note was issued, the place where the note was issued, the signature of the person issuing the note etc.

Includes an unconditional promise of payment

Promissory notes are regulated by the 1930 Geneva Convention of Uniform Law on Bills of Exchange and Promissory Notes. The regulations of this kind of a law also stipulate that this type of a promissory note in California should have an unconditional promise of payment from one party to the other.

Can be useful when a traditional loan cannot be obtained

Such type of a note can be really beneficial when a person is unable to obtain a loan from a bank or some other similar traditional lender. But these types of notes can be much more risk prone because the lender does not have the scale of resources and means that are available in financial institutions like banks.

At the same time, there can be legal problems for the payee as well as the issuer in case of a default. Due to this reason, it is very important to notarize a promissory note. When this type of a note is notarized, it can be legally binding and then it can be used in a court of law as evidence and in order to seek legal remedy - if there is a default.

Author Bio

Carl writes often about legal drafting and help.