You will receive a promissory note if you are borrowing some amount of money from a financial institution. On the other hand, a financial institution or lender has to create a promissory note and give it to the borrower. Here, we show you the tutorial to create a promissory note.
Complete the Detail
You must have a piece of complete information before creating a promissory note. The information that the lender and borrower have to agree is including the amount of money a borrower wants to borrow, interest rate, late fees, security, terms of repayment, default clause, and the representative’s name.
Know the Credit Report
As the person or institution that wants to lend money, you have to know the credit report of the borrower. You can check the credit report history from the three most popular Credit Bureaus, which are Experian, Equifax, and TransUnion.
Write a Promissory Note
You can start to write a promissory note when you and the borrower have agreed with the terms. There are three crucial elements that you have to include in the note.
The content of this section is about a promise from the borrower that he or she will pay back the money they borrow to the lender. It also included the addresses of the lender and the borrower.
Like the name, this section explains the percentage of the interest the borrower has to pay. The lender also has to give information about the type of interest the borrower has to pay. Let say the borrower has to pay the interest based on the bank condition.
If the interest rate on the bank increase it means the interest rate of the money the borrower has to pay also increases. This section also explains the location where the borrower has to give the money as well as the charge if he or she doesn’t pay it to the lender.
It is optional based on the agreement. This section explains the number of installments and the deadline to pay them.
Non-Negotiable Promissory Note
You can also learn the tutorial to create a promissory note for a non-negotiable promissory version if you use the note as a contract. The detail of a non-negotiable promissory note is similar to the ordinary note. The difference is in the information you have to include on the note.
You have to include the credit card number and its expiration number, maker’s name, student ID number, and other crucial information. A borrower has to include the information to make sure that he or she will pay the money on time until the end of the payment period. Even if they don’t pay the money, they know the consequences. Indeed, there will be no more negotiation, and everything will be based on the promissory note.
Nowadays, you don’t need to create this not manually. You only have to download the promissory note template. You only have to complete the blank space on the template. Indeed, you still have to understand the tutorial to create a promissory note to fill the template correctly. Then, you can print the note and sign it.