Promissory Note Template

A Promissory Note is a written promise from a borrower to repay a specific sum of money to a lender under agreed terms. It records who is lending, who is borrowing, the principal amount, the interest rate, how and when the money is paid back, and what happens if a payment is missed. People use it for loans between family members or friends, for a business advancing funds to a partner, or for any situation where a handshake needs to become a signed, dated record. The signature at the bottom is what turns a casual promise into a document both sides can point to later.

This layout keeps the amounts and schedule near the top so the terms are easy to read, then places the borrower signature block — with an optional witness or notary line — at the end. To be clear, this is a general-purpose layout with the sections most notes need, not financial or legal advice. Interest limits (usury laws) vary by state and country, so check your jurisdiction's caps before setting a rate and have an attorney review the wording for a larger loan.

How this document is used

A parent lends an adult child money for a car and writes a note so repayment terms are clear on both sides. A small business owner borrows startup funds from a friend and signs a note that spells out monthly installments. A supplier advances credit and asks for a signed note as security. In each case the note protects the relationship: nobody has to rely on memory about what was agreed, because the amount, rate, and due dates are written down and signed.

Set the amounts and schedule before signing

Fill in the principal, the annual interest rate, and the repayment schedule — a single lump sum on the maturity date, or regular installments — before anyone signs. Open the Word (DOCX) file to change clauses, add a prepayment option, or adjust the late-payment and default language. The fillable PDF is best when the terms are already settled and you just need to complete and sign. Keep the signature and date lines intact so the finished note is complete.

Common mistakes to avoid

Do not leave the interest rate blank or vague — state a clear annual percentage, or write "0%" if the loan is interest-free. Do not skip the maturity date or the consequences of default. Avoid setting a rate above your local legal limit, which can make the note unenforceable. And remember the borrower must sign and date the note; a witness or notary line adds an extra layer of proof for a significant amount.

Example scenario

A friend lends $5,000 to help another open a bakery. They write a note for $5,000 principal at 4% annual interest, repaid in twelve monthly installments starting the following month, with a $25 late fee after a ten-day grace period. The borrower signs and dates the note, a neighbor signs as witness, and each keeps a copy. When a payment runs late, the lender simply references the note rather than the friendship.

Choosing PDF or Word

This page offers a printable fillable PDF and an editable Word (DOCX) file. Use the Word file when you need to rewrite terms, change the schedule, or add clauses before printing, and the PDF when the note is settled and you only need to fill and sign. Both include a dated signature block with an optional witness or notary line so the note is ready to execute.