Loans And Debt
Customized Agreements
Personal Loan Agreement and Promissory Note
Lend or borrow money with the terms written down — amount, interest, repayment schedule, and what happens if payments stop.
Also called: promissory note, personal loan agreement, loan agreement between friends.
What you walk away with
A clean multi-page PDF and DOCX after you finish — not a web-form dump. Preview the document before you pay.
- PDF export
- DOCX export
- E-sign included
- No subscription
Interest caps, lending licence requirements, permitted late charges, collection practices, and limitation periods are set by state law and vary considerably. This note states no permitted rate.
Jurisdiction details
See how this document starts in your state
Choose the state where the document will be used. The state page shows the maintained coverage level, local-rule limits, and a builder link with the canonical state code already selected.
When this fits
Use this document when…
- Lending to family or a friend and wanting it recorded
- A private loan for a vehicle, deposit, or business need
- Formalising money already lent informally
- Any loan where repayment happens over time
Before you start
Information you will need
- Lender and borrower details
- Principal amount, purpose, and the date funds were provided
- Interest rate and how it is calculated
- Repayment schedule, first payment, and maturity date
- Grace period, late charges, and what counts as default
- Any security or guarantor, and the governing state
What you receive
- An eight-article Loan Agreement and Promissory Note
- Signature blocks for borrower and lender
- Completion and signing instructions
- PDF and editable DOCX export
Document questions
Questions about this document
What is a Personal Loan Agreement and Promissory Note?
Lend or borrow money with the terms written down — amount, interest, repayment schedule, and what happens if payments stop.
How do I create a Personal Loan Agreement and Promissory Note?
Lending to family or a friend and wanting it recorded; A private loan for a vehicle, deposit, or business need; Formalising money already lent informally
What should a Personal Loan Agreement and Promissory Note include?
Lender and borrower details; Principal amount, purpose, and the date funds were provided; Interest rate and how it is calculated; Repayment schedule, first payment, and maturity date; Grace period, late charges, and what counts as default
Special situations
- Every state caps the interest a private lender may charge. Exceeding it is usury, and the penalty ranges from forfeiting the interest to forfeiting the whole loan — the borrower agreeing does not cure it.
- An unsecured note gives the lender a claim against a person, not a right to an asset. Where property secures the loan, perfecting that interest usually requires a separate filing.
- A guarantor is liable for the full debt, generally without the lender having to pursue the borrower first.
- Lending as a business rather than privately can require a licence in some states.
- Keep a record of every payment received. Disputes about private loans are almost always disputes about what was repaid.
Frequently asked questions
What interest rate can I charge?
Whatever your state permits, and no more. Every state caps private lending rates, and exceeding the cap is usury — with penalties ranging from losing the interest to losing the entire loan. The borrower's agreement does not make an unlawful rate lawful. A zero-interest loan is lawful everywhere.
Is a promissory note legally binding?
Yes, provided it records a genuine loan with clear terms and both parties sign. What it cannot do is make an unwilling or insolvent borrower able to pay — a note gives you a claim, not the money.
What is the difference between secured and unsecured?
A secured loan is backed by specific property you can claim if the borrower defaults. An unsecured loan is backed only by the borrower's promise. Where collateral is given, perfecting the security interest usually needs a separate filing, and an unperfected interest can rank behind other creditors.
Should I charge interest to a family member?
That is a personal decision, but be aware of two things: an interest-free or below-market loan can have tax implications above certain amounts, and lending to family changes the relationship. If you could not survive not being repaid, treat it as a gift.
What does acceleration mean?
That the whole remaining balance becomes due at once on default, rather than only the missed payment. Without it stated, a lender may only be able to recover the instalments actually missed, which is a very different position.
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Not legal advice
Locke Direct helps structure documents and workflows. It does not replace a qualified lawyer for complex, unusual, or high-risk situations.
Last reviewed July 29, 2026.