A promissory note agreement is a legal document that outlines the terms and conditions of a loan between two parties. These agreements are often used in personal or business transactions where a borrower agrees to repay the lender a set amount of money over a specific period of time. If you’re looking for a sample promissory note agreement, you’ve come to the right place.
Before we dive into the specifics of a sample promissory note agreement, it’s important to understand the basic components of this type of document. A promissory note agreement typically includes the following information:
1. Parties involved: This section should identify the borrower and lender by name and address.
2. Loan amount: This section should state the amount of money being borrowed and the currency in which the loan will be repaid.
3. Interest rate: This section should specify the interest rate that will be charged on the loan.
4. Repayment terms: This section should outline the repayment schedule, including the frequency of payments and the due date for each payment.
5. Default provisions: This section should describe what will happen if the borrower fails to make payments on time or defaults on the loan.
Now, let’s take a look at a sample promissory note agreement:
PROMISSORY NOTE AGREEMENT
This promissory note agreement (the “Agreement”) is made and entered into on [Date] by and between [Borrower Name], with a mailing address of [Address], (“Borrower”) and [Lender Name], with a mailing address of [Address], (“Lender”).
1. Loan Amount. Borrower agrees to borrow from Lender the sum of [Loan Amount] dollars ($[Loan Amount]), which will be disbursed to Borrower in one lump sum.
2. Interest Rate. The interest rate for this loan will be [Interest Rate] percent ([Interest Rate]%). Interest will accrue on the outstanding principal balance of the loan from the date of disbursement to the date the loan is fully repaid.
3. Repayment Terms. The loan will be repaid in [Number of Payments] monthly payments of [Payment Amount] dollars ($[Payment Amount]) beginning on [Date]. Each payment will be due on the [Due Date] of each month.
4. Default Provisions. If Borrower fails to make any payment as provided for in this Agreement, the entire remaining principal balance of the loan and all accrued interest shall become immediately due and payable. Lender shall also be entitled to all costs and expenses incurred in connection with the collection of the outstanding balance.
5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of [State].
This sample promissory note agreement includes all of the basic components of a typical promissory note agreement. However, it’s important to note that promissory note agreements can be customized to meet the needs of the parties involved.
In summary, a promissory note agreement is an important legal document when lending or borrowing money. It’s essential to understand what needs to be included in the document and to consult with a legal professional to ensure that the agreement meets the specific needs of the parties involved. This sample promissory note agreement can serve as a starting point for drafting your own agreement.