Documents / Financial
Promissory Note
A simple, enforceable written promise to repay money — the lightweight cousin of a loan agreement.
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General text. One nationwide text with your state’s governing law. It does not adapt to your state’s mandatory rules, so check them before relying on it.
Version 2026-09-09.8. No qualified legal review is recorded. Read the complete document and obtain advice for your circumstances.
Review and execution steps
- Check principal, rate, payment schedule, maturity and default terms for arithmetic and applicable lending law.
- Confirm whether an original negotiable instrument or separate security agreement is needed; Quill does not provide an electronic-note vault.
Guidance updated September 8, 2026. Source coverage is limited to the topics described; historical sources are identified. State, local and transaction-specific requirements still apply.
Time
~5 min
Questions
≤ 19
Steps
4
Export
PDF · Word
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What we will cover
- 01
Location
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- 02
Borrower & Lender
- 03
Note Terms
- 04
Loan purpose and legal review
- 05
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About this document
A promissory note is a written, one-way promise to repay money, signed by the borrower alone. It states the principal, the interest rate if any, and how repayment happens — a lump sum on a fixed date, monthly installments, or on demand — along with any late charge and where payments are made. It is short by design, and it is the evidence that the money was a loan rather than a gift, which matters to a court and to the IRS.
Interest is the term to get right. Every state sets a usury limit on private loans, and charging above it can void the interest or the entire note. Family loans above the annual gift-tax exclusion should carry at least the IRS Applicable Federal Rate to avoid imputed-interest treatment. The most common drafting mistake is leaving out both a due date and a demand mechanism, which makes the note hard to enforce and starts no clock at all.
Common questions
Do I need a promissory note or a loan agreement?+
A promissory note fits a straightforward loan where the only obligation is to repay: the borrower signs, and the lender keeps the original. A loan agreement is signed by both sides and adds collateral, co-signers, covenants, and detailed default remedies. If the loan is secured by property or comes with conditions on how the money is used, use the loan agreement instead.
Does a promissory note have to be notarized or witnessed?+
Generally no — it binds the borrower on their signature alone, and unwitnessed notes are enforced routinely. Notarizing makes it much harder for a borrower to later deny signing, which is cheap insurance on a large loan. A note secured by real estate is different: the accompanying mortgage or deed of trust normally must be notarized before it can be recorded.
Is a promissory note enforceable in court?+
Yes. A signed note showing the amount, the promise to repay, and the terms is the core evidence in a collection suit, brought in small claims or civil court depending on the size. Keep the original signed note and a record of every payment received. Limitation periods for written contracts commonly run somewhere between three and six years from the missed payment, so do not sit on a default.
General information, not legal advice — laws vary by state and change over time.