Promissory Note Template Word

PROMISSORY NOTE (SECURED/UNSECURED)

Document ID: PN-202X-001
Effective Date: [Date]
Version: 1.0
Governing Jurisdiction: State of [State Name]

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LEGAL DISCLAIMER

This document is provided for informational and drafting assistance purposes only and does not constitute formal legal advice. Promissory notes are subject to specific state statutes, including usury laws, UCC Article 3 requirements, and consumer protection regulations. Users are strictly advised to consult with qualified legal counsel in the applicable jurisdiction prior to execution to ensure compliance with local statutes and to confirm the enforceability of specific provisions, including interest rate caps and acceleration clauses.

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1. PARTIES

This Promissory Note (“Note”) is made and entered into as of the Effective Date by and between:

BORROWER: [Full Legal Name of Borrower], with a principal address at [Full Physical Address] (“Borrower”).

LENDER: [Full Legal Name of Lender], with a principal address at [Full Physical Address] (“Lender”).

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2. 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] Dollars ($[Amount]), together with interest on the unpaid principal balance at a rate of [Percentage]% per annum, calculated on the basis of a 365-day year.

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3. REPAYMENT TERMS

The principal and accrued interest shall be payable as follows: (a) Installments: Borrower shall pay [Monthly/Quarterly/Annual] installments of $[Amount] beginning on [Date] and continuing until [Date], at which time the entire remaining balance of principal and interest shall be due and payable in full. (b) Prepayment: Borrower reserves the right to prepay the principal amount in whole or in part at any time without penalty. Any partial prepayment shall be applied first to accrued interest and then to the principal balance.

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4. DEFAULT AND ACCELERATION

If the Borrower fails to make any payment when due under this Note, or if the Borrower becomes insolvent or files for bankruptcy, the Lender may, at its option, declare the entire unpaid principal balance and all accrued interest immediately due and payable (“Acceleration”), without further notice or demand, except as may be required by law.

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5. LATE CHARGES AND COLLECTION COSTS

If any payment is not received within [Number] days of its due date, the Borrower shall pay a late fee of [Amount or %]. In the event of default, the Borrower agrees to pay all reasonable costs of collection, including, but not limited to, reasonable attorney’s fees and court costs incurred by the Lender in enforcing this Note.

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6. REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants that (i) it has full legal power and authority to enter into this Note; (ii) this Note constitutes a valid and binding obligation of the Borrower, enforceable in accordance with its terms; and (iii) the execution and performance of this Note will not violate any law, regulation, or contract to which the Borrower is a party.

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7. GOVERNING LAW AND JURISDICTION

This Note shall be governed by, construed, and enforced in accordance with the laws of the State of [State Name], without regard to its conflict of laws principles. Any legal action or proceeding arising under this Note shall be brought exclusively in the courts located in [County], [State].

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8. 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 modification or waiver of any term of this Note shall be valid unless in writing and signed by both the Borrower and the Lender. (d) Binding Effect: This Note shall be binding upon the parties and their respective successors and permitted assigns.

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9. EXECUTION AND SIGNATURES

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

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

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Drafting: Copy the text above into your Word Processing software (Microsoft Word or Google Docs). Replace all bracketed information [ ] with precise, verified data.
2. Compliance Verification: Before finalizing, verify if the interest rate selected exceeds the "usury limit" of the governing state. If the loan is for a business purpose, check if your jurisdiction permits higher rates than for consumer loans.
3. Signatory Authority: Ensure that the individual signing on behalf of a corporate entity holds the legal authority (e.g., Board Resolution or Operating Agreement power) to bind the entity to financial debt.
4. Execution: Use a secure digital signature platform (DocuSign, Adobe Sign, or HelloSign). Ensure that the audit trail (the certificate of completion) is downloaded and stored with the executed Note.
5. Record Retention: Maintain the original digital file or a signed physical copy in a secure, backed-up environment. If the Note is secured by collateral (real estate or equipment), ensure a UCC-1 Financing Statement or Mortgage/Deed of Trust is filed with the appropriate public registry.