What is a note payable?

A note payable, also known as a promissory note, is a document in which one party (the borrower) promises to pay another party (the lender) a specific amount of money in return for money, goods, or services. The note payable often contains all the terms related to the transaction, including the loan amount, interest rate, due date, and payment structure.

Does a note payable require a notary?

Although a notary and witness are not required in most jurisdictions, it is always recommended to include a notary to help prove the validity of the document should you ever need to. For the same reason, including a witness is helpful. If possible, it is a good idea to include both.

What transaction-related details should be included?

Be as specific as possible in describing what the borrower is receiving from the lender, whether it is a mortgage loan, goods, services, etc. You will then describe how the lender expects to be repaid. Our note payable form allows you to include miscellaneous terms and conditions later in the form builder should you need to further customize your agreement.

What should be done after the note payable is signed?

At a minimum, all parties that sign the document should receive a copy once it is fully executed (everyone has signed). Other interested parties may need or want copies as well. Be sure to store your copy in a safe location. It is a good idea to keep both a physical and electronic copy.

Note Payable

A note payable form is essentially a promise to repay made from a borrower to a lender.

With our note payable template, you can indicate whether payments are due monthly, in one lump sum, or on demand by the lender. When finished, the note will clearly list the essential terms of the transaction, including the loan amount, interest rate, due date, and payment structure.

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Note Payable

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When to use a note payable

You want to require collateral in exchange for a loan
You are a lender that wants to loan out money
You want to define a loan's payment structure
You need to set the terms of a loan

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How to create a note payable in 3 steps

Gather Information

As you complete your note payable, you will need to provide certain relevant information. This includes the names and addresses of all borrowers and lenders, transaction details, and repayment terms.

Answer Key Questions

Use the information you collected to complete the note payable. We make this easy by guiding you each step of the way and helping you to customize your document to match your specific needs. The questions and information we present to you dynamically change depending on your answers and the state selected.

Review

Always read your document thoroughly to ensure it contains everything you need and is free of errors. In any case, once you finish creating your document, you will be able to alter it as much as you like in Microsoft Word. However, if you do not need to make any changes, you can simply download the PDF version and have the parties sign the agreement.

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