Promissory Note Template for Personal Loan

PROMISSORY NOTE (UNSECURED)

Document ID: PN-PERS-[YYYYMMDD]-001 Effective Date: [Date] Version: 1.0 Governing Jurisdiction: State of [State]

1. LEGAL DISCLAIMER & NOTICE

This Promissory Note is provided for informational purposes only and does not constitute formal legal advice. Laws governing lending, usury limits, and debt collection vary significantly by jurisdiction. The user is strongly advised to consult with qualified legal counsel in the applicable jurisdiction to ensure compliance with local consumer protection statutes, lending licensing requirements, and tax implications. Use of this template does not establish an attorney-client relationship.

2. PARTIES

LENDER: [Lender Full Legal Name], residing at [Lender Principal Address] ("Lender"). BORROWER: [Borrower Full Legal Name], residing at [Borrower Principal Address] ("Borrower").

3. PROMISE TO PAY

For value received, the Borrower unconditionally promises to pay to the order of the Lender the principal sum of [Amount in USD] USD ($[Amount]), together with interest on the unpaid principal balance at a rate of [Percentage]% per annum, calculated on a simple interest basis.

4. PAYMENT TERMS

4.1 Repayment Schedule: Borrower shall repay the principal and accrued interest in [Number] monthly installments of $[Installment Amount], commencing on [First Payment Date] and continuing on the same day of each month thereafter until [Maturity Date] (the "Maturity Date"). 4.2 Prepayment: Borrower reserves the right to prepay the outstanding principal balance in whole or in part at any time without penalty. 4.3 Late Fees: Any payment not received within [Number] days of the due date shall be subject to a late fee of $[Amount] or [Percentage]% of the overdue amount, whichever is greater, not to exceed the maximum permitted by applicable law.

5. DEFAULT

The occurrence of any of the following shall constitute an "Event of Default": (a) Failure to make any payment when due; (b) The insolvency, bankruptcy, or commencement of any voluntary or involuntary liquidation proceedings regarding the Borrower; (c) Breach of any material representation or warranty contained herein. Upon an Event of Default, the Lender may, at its option, declare the entire remaining unpaid principal and accrued interest immediately due and payable.

6. REPRESENTATIONS AND WARRANTIES

Borrower represents that they have the full legal capacity to enter into this agreement, that the execution of this Note does not conflict with any other contractual obligations, and that all information provided to the Lender is accurate and complete.

7. GOVERNING LAW AND DISPUTE RESOLUTION

7.1 Governing Law: This Note shall be governed by and construed in accordance with the laws of the State of [State], without regard to conflict of law principles. 7.2 Dispute Resolution: Any dispute arising out of this Note shall be settled by binding arbitration administered by the American Arbitration Association (AAA) in accordance with its Commercial Arbitration Rules. The seat of arbitration shall be [City, State]. The prevailing party shall be entitled to recover reasonable attorney’s fees and costs.

8. MISCELLANEOUS

8.1 Severability: If any provision of this Note is held to be invalid or unenforceable, such provision shall be severed, and the remaining provisions shall continue in full force and effect. 8.2 Entire Agreement: This Note constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior understandings. 8.3 Amendments: No amendment or waiver of any provision of this Note shall be effective unless in writing and signed by both parties. 8.4 Successors and Assigns: This Note shall be binding upon the heirs, executors, administrators, and permitted assigns of the Borrower.

9. EXECUTION AND SIGNATURE BLOCKS

FOR LENDER: Signature: _____________________________________ Printed Name: [Lender Name] Date: [Date]

FOR BORROWER: Signature: _____________________________________ Printed Name: [Borrower Name] Date: [Date]

10. STEP-BY-STEP EXECUTION AND FILING GUIDE

1. Document Preparation: Copy this text into a word processor. Replace all bracketed text (e.g., [Amount in USD]) with the specific details of your agreement. Ensure no brackets remain.
2. Review Compliance: Check your local State’s usury laws regarding maximum allowable interest rates. Ensure the interest rate in Section 3 does not exceed the legal limit for personal loans in your jurisdiction.
3. Verification: Confirm the identity of the counterparty. It is recommended to attach a copy of a government-issued ID to the record copy of this note.
4. Execution:
   • Print two (2) copies.
   • Both parties must sign in ink in the presence of a Notary Public (recommended for enforceability in court).
   • If using digital signatures (DocuSign, Adobe Sign), ensure the platform provides a tamper-evident audit trail (Certificate of Completion).
5. Record Retention:
   • The Lender should retain the "wet ink" or original digital execution as a primary financial asset.
   • Provide a fully executed duplicate copy to the Borrower.
   • Keep a secondary digital backup in a secure, encrypted cloud environment.
6. Payment Tracking: Maintain a ledger documenting every payment received, including date, amount, and remaining balance, to provide clear evidence in the event of a payment dispute.