Promissory Note / Loan Agreement

A promissory note and a loan agreement both record that one person or company lent money to another and how it will be paid back. A promissory note is the shorter form: the borrower promises to repay, signs it, and the lender keeps it as proof. A loan agreement is signed by both sides and spells out the terms more fully. This form makes either, and a switch at the top changes the title, the opening words and the signature block.

You enter the amount, the date and the two parties, then choose how interest and repayment work. Interest can be none, simple or compound. Simple interest is charged only on the amount lent, by the actual number of days. Compound interest is added to the amount lent after each full period of 365 days and then earns interest itself. Repayment can be one payment on a due date, with the interest worked out for you, or equal monthly instalments. For instalments the form fills in a repayment schedule: the monthly amount from the standard annuity formula, and for every month the interest, the part that repays the loan and the balance left. The formula and the rounding rule are printed with the schedule so that both sides can check the numbers.

The form never suggests an interest rate. Many countries cap the interest on a loan, and some require a licence to lend as a business or a tax look at loans between relatives. The country notes point to those rules and state no figure, because limits change. It is a general template, not legal advice.

• You lend money to a friend, a relative, an employee or a business and want the terms in writing.
• You borrow money and the lender asks for a note that you sign.
• You want a monthly repayment schedule worked out, with the interest and the balance for every month.
• You want a single due date with the interest calculated by the day.

1. Choose the country whose law applies, then choose a loan agreement or a promissory note.
2. Enter the lender and the borrower, the date, the amount and the currency; if the money is paid out later, give the payout date.
3. Choose no interest, simple or compound, and type the yearly rate. Check the legal ceiling that applies before you do.
4. Choose one payment on a due date or monthly instalments; for instalments pick the number of months and the first date.
5. Set the days of delay before the whole loan can be called in, early repayment and, if you want, security.
6. Read the repayment schedule and the totals, print the document and have it signed; keep the bank record of every payment.

• Setting an interest rate above the legal limit of the country, which can make the interest void or worse.
• Writing "pay back when I can" instead of a due date or a schedule.
• Lending a large sum to a relative at no interest without asking about tax.
• Lending as a business without the licence the country requires.
• Handing over cash with no receipt or bank record, so the payout cannot be proved.
• Forgetting that the instalment figures are rounded, so the last instalment can differ by a few cents.

1. Fill in
2. Check the preview
3. Save as PDF, Word or Excel

Pick the country you need. Each version uses the wording and layout commonly found there; a version marked “check with local advice” should be read by someone who knows the local rules before it is used.

• International (XX): Written in English, Korean, Japanese, German
• United States (US): Written in English – check with local advice
• United Kingdom (GB): Written in English – check with local advice
• Korea (KR): Written in Korean, English – check with local advice
• Japan (JP): Written in Japanese, English – check with local advice
• Germany (DE): Written in German, English – check with local advice