![]() Demand Promissory NoteĪ demand promissory note makes the payment due when the lender asks for the money back. You can also decide whether to charge interest on the loan amount and include the interest in the document if needed. Your friend agrees to repay the money by January 1.Ī simple promissory note will state that the full amount is due on the specified date. If you’re expecting a lump sum repayment, you will typically use a simple promissory note.įor example, let’s say you loan a friend $1,000. You should craft your promissory note to fit the type of transaction it concerns. Promissory notes come in various forms which largely depend on the type of loan agreement. What Type of Promissory Note Should I Use? Or it could be more complex like a car note or a mortgage. It could be something as simple as a one-time loan to a friend. Promissory notes are used in all kinds of lending situations. This means the borrower’s obligation to pay is not subject to any condition, such as requiring a particular action to occur first. But let’s stick with the more familiar terms of borrower and lender.Ī promissory note is considered an unconditional promise to pay. In legal terms, these people are called the maker and the payee, respectively. In this article, we refer to the person making the promise as the borrower, and we’ll call the person who receives the payment the lender. What’s a Promissory Note and When Do I Need One?Ī promissory note is essentially a promise, put in writing, to pay another person a sum of money. Call 30 today to begin your case assessment. Robinson & Henry’s Civil Litigation Team will thoroughly review your loan documents to ensure they are providing the full legal protection you need. Unfortunately, that’s not always reality. Ideally, you loaned money to a reliable person who will make good on their promise. Get an Attorney to Review Your Promissory NoteĪ promissory note is exactly what its name suggests - a promise to pay you back. ![]() Read this article to better understand how a promissory note works and what it must include. As in many states, a promissory note must meet multiple conditions to be enforceable in Colorado. It provides a legal record of your loan, which helps protect you and ensures you will be repaid.Ī lawsuit is sometimes your only means of legally enforcing a promissory note if the opposing party fails to pay you. ![]() A promissory note is particularly important if you are lending someone a large amount of money. It is often used in real estate, vehicle, personal, and college loans. A promissory note is a written agreement to pay back money in a certain time with specific terms.
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