Carl Glendon

Types Of Details To Include In A Promissory Note

A promissory note is a type of unique financial instrument that puts borrowers in a legal obligation to pay a specified sum of money to the lender on demand or at a specified date. These types of instruments are negotiable and are issued under the Negotiable Instruments Act. These can be of various types, such as with joint borrowers or single, and have to be paid in installments or on demand or even in a lump sum without interest or with interest. Read and find out what should be included in a free promissory note template.

Names and details

The names and addresses of the borrower and the lender should be included in any promissory note, no matter which type of note is being used. The full name should be included, so that both parties can be identified readily and there is no confusion regarding the identity of any one of them.

Amount of money

The amount of money that is being borrowed by the borrower from the lender should be included in the note. It should also be mentioned whether any collateral is being used, such as a house or a car or anything that has some amount of value.

The collateral mentioned in the note can be seized by the lender in case of the borrower does not repay the note. For instance, when a home is purchased, it becomes the collateral on the mortgage.

Frequency of payment

The promissory note should also mention how often the repayments have to be made and in what amount. It is better to include the date of paying back of the money if it is a lump sum repayment or the schedules of payment with the exact dates if the repayment will be made in installments. A free promissory note template in Montana can be used to create a perfect note of this type.

Signatures

Both parties have to sign this kind of a note in order to make it legally enforceable. Unless this is properly done, there would be questions regarding the validity of the promissory note in the eyes of the law.

Author Bio

Carl writes often about legal drafting and help.