How do you write a promissory note for a personal loan?


Quick Answer

To write a promissory note for a personal loan, start with the borrower's details, following up with the lender's name and the terms of the loan, according to SampleNote.org. The signing of this note by the lender and the borrower completes the process and legalizes the document.

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Full Answer

A promissory note for a personal loan is a document that establishes a relationship between a borrower and a lender in which the borrower promises to repay a specified amount of money, according to SampleNote.org. These notes are unpopular and rarely used because the borrower may feel that the lender lacks trust in him. This prompts the lender to feel shy, especially if the borrower is a close friend or relative. Because these notes are typically used when lending money to family and close friends, they rarely include interest rates.

The first section of a promissory note contains the borrower's name, address and contact information as well as the name of the lender, as explained by SampleNotes.org. The terms of the loan section contains the total loan amount to be settled and the date when the loan should be cleared. This section may also specify the interest rate accrued on the loan and the penalties in case of a delay or default in the repayment.

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