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Protect Your Interests with a Promissory Note Form
Do you have a large or expensive item that you plan to sell privately on credit? Are you considering loaning money to a friend, neighbor or family member, money you’d like to have repaid to you in a timely manner? If you answered yes to either of these two questions, a promissory note form is an absolute must for securing these types of deals. Whether you are selling an item on credit, and thus allowing the buyer to make payments, or lending money to someone, it pays to have some legal insurance on your side that will protect you in the event of default on the loan. This is exactly the type of insurance a promissory note can afford you, and because it’s never been easier to obtain a blank promissory note for this purpose, it always makes good sense to take this extra step, regardless of how much you happen to trust the other party to the transaction. To help you accomplish this, in this article we will briefly define the promissory note form, describe some of the options for obtaining a blank promissory note, and provide an outline highlighting the various elements and language these documents should always contain.
Promissory Note Form Explained
Much like the name suggests, a promissory note is really nothing more than a “promise” to pay. It is a legal document that is executed between a seller and buyer, lender or borrower, that spells out the details of a given transaction, including the names of both parties and the dollar amount of the item or loan, and outlines a repayment schedule and/or a final date when the loan must be paid off. Once the promissory note form is signed by both parties it becomes legal and binding in the eyes of the law, allowing the seller or lender to seek legal recourse should the buyer or borrower default on the terms.
Many people are intimidated by legal documents and, as a result, will often pay hundreds of dollars to have an attorney draft the document for them. This may be an appropriate course of action for some of the more formal and complicated legal transactions, but it’s fairly unnecessary in the case of a promissory note. Today it is easier than ever to obtain a quality blank promissory note, as there are literally thousands of online websites now offering these documents in template form, usually as a promissory note PFD (portable formatted document). The promissory note PFD is a type of template that allows the seller or lender to create a custom document that is tailored to their specific situation—a document they can create online and then print out to be signed by both parties. As a rule, these documents will contain all of the specific legal language and required elements to ensure the enforceability of the document, saving the seller or lender the hassle of having to create the promissory note form themselves.
Promissory Note Form: Required Elements
When searching online for a blank promissory note to employ in your specific transaction, whether you plan to use a promissory note PFD or other type of template, you must scan the document carefully to ensure it contains certain required elements. These elements, which when included together will guarantee the legality and enforceability of the document, include:
• Lender/Seller Details. As the person selling the item or lending the money, you must show that you are available to the buyer/borrower should he/she have any questions or concerns regarding the transaction. Therefore, you must include all of your contact details, including address, city, state, zip code, telephone number and email address, if applicable.
• Borrower Details. Because the promissory note form is a legally binding document, it’s imperative you record the name and contact information of the borrower, even if that borrower/buyer is someone you know personally.
• Amount Borrowed. When selecting a blank promissory note, you’ll need to make sure it contains ample space to record all of the details regarding the transaction. This could include a description of the item being sold and the total amount being borrowed.
• Payment Details. A promissory note form must include a schedule of when each payment is due and for what amount. This can be as formal or informal as you wish, as long as you include a final payment date—the date on which the entire balance must be paid in full. Also, if you plan to charge interest to the buyer/borrower, the percentage and/or total amount of interest to be charged should be included in this section of the document.
Naturally, the final portion of the promissory note form should contain a minimum of three signature lines, one each for the lender, borrower and a witness to the transaction. This is where the document should be executed and dated, with the borrower and lender both retaining a copy for their records.