Promissory Note Template No Interest

PROMISSORY NOTE (NON-INTEREST BEARING)

DOCUMENT ID: PN-ZERO-2024-[Unique_Sequence_Number]
EFFECTIVE DATE: [Effective Date]
VERSION: 1.0
GOVERNING JURISDICTION: [State/Country]

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LEGAL DISCLAIMER

This Promissory Note template is provided for informational and drafting purposes only and does not constitute formal legal advice or the establishment of an attorney-client relationship. Laws governing the enforceability of debt instruments, usury, and statute of limitations vary significantly by jurisdiction. Parties are strongly encouraged to have this document reviewed by qualified legal counsel in the applicable jurisdiction prior to execution to ensure compliance with local consumer protection laws and statutory requirements.

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1. PARTIES

This Promissory Note (“Note”) is made and entered into this [Effective Date] by and between:

BORROWER: [Borrower Full Legal Name], an individual/entity with a principal address at [Borrower Principal Address] (“Borrower”); and

LENDER: [Lender Full Legal Name], an individual/entity with a principal address at [Lender Principal Address] (“Lender”).

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2. PRINCIPAL AMOUNT

For value received, the Borrower unconditionally promises to pay to the order of the Lender the principal sum of [Amount in USD] (the “Principal Amount”), in lawful money of the United States of America.

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3. INTEREST

This Note shall not bear interest on the unpaid Principal Amount. The total amount due hereunder shall be limited to the Principal Amount specified in Section 2, provided that the Principal Amount is paid in full on or before the Maturity Date.

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4. REPAYMENT TERMS

The Principal Amount shall be repaid as follows: (a) Maturity Date: The entire unpaid Principal Amount shall be due and payable in full on [Maturity Date] (the “Maturity Date”). (b) Prepayment: The Borrower reserves the right to prepay the Principal Amount, in whole or in part, at any time without penalty or premium. (c) Method of Payment: All payments shall be made by wire transfer, certified check, or other immediately available funds to the account designated in writing by the Lender.

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5. DEFAULT AND ACCELERATION

The occurrence of any of the following shall constitute an “Event of Default”: (i) Borrower’s failure to pay the Principal Amount by the Maturity Date; (ii) the filing of a bankruptcy or insolvency petition by or against the Borrower; or (iii) the breach of any material covenant contained in this Note. Upon an Event of Default, the Lender may, at its option, declare the entire remaining Principal Amount immediately due and payable.

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6. GOVERNING LAW AND JURISDICTION

This Note shall be governed by and construed in accordance with the laws of [Governing Jurisdiction], without regard to its conflict of law principles. Any dispute arising out of or relating to this Note shall be resolved exclusively in the state or federal courts located in [County/City, State].

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7. MISCELLANEOUS

(a) Entire Agreement: This Note constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, oral or written. (b) 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. (c) Amendments: No amendment or waiver of any provision of this Note shall be effective unless in writing and signed by both parties. (d) Counterparts: This Note may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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8. EXECUTION

FOR [LENDER NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

FOR [BORROWER NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Drafting: Replace all bracketed text (e.g., [Amount in USD]) with the specific details of your transaction. Use a word processor (Word/Google Docs) to remove all brackets and instructional text.
2. Verification of Signatory Authority: Ensure the individual signing for each party has the actual or apparent legal authority to bind the entity. If the party is a corporation, ensure the signer holds a C-suite or authorized officer title.
3. Execution:
   • Digital: Upload the finalized PDF to a secure e-signature platform such as DocuSign, Adobe Sign, or HelloSign to capture a time-stamped audit trail.
   • Physical: If signing in wet ink, ensure that both parties receive a fully executed original copy.
4. Record Retention: The Lender should retain the original signed Note in a secure, fireproof, or digital encrypted vault. The Borrower should retain a copy as a liability record for tax and accounting purposes.
5. Notice: If the loan amount is significant, consult a tax advisor regarding potential imputed interest rules (e.g., IRS Section 7872) even if the note is contractually interest-free, as tax authorities may deem interest to exist for tax purposes.