Is a promissory note a legit contract to let someone borrow money and hold them legally responsible to pay bac?
February 7th, 2010 | 
Author: If not.. then what should I use? Also… can the blanks in the contract stating name and amount and such be written in or do they have to be typed? And where could I find a good promissory note template?
Posted in Promissory Note | 
Tags: borrow, contract, hold, legally, legit, money, Note, Promissory, responsible, someone, Them
One Response to “Is a promissory note a legit contract to let someone borrow money and hold them legally responsible to pay bac?”
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Requirements for a promissory note are that it be in writing (handwritten or typed). The amount borrowed clearly set forth. The date the promissory note was written. The date or method of determining to due date of the loan.
The promissory note must be signed by the party or parties who are responsible for repayment.
A number of promissory notes can be found by searching for “free legal forms” Forms can be purchased at any office supply stores
The most common mistake is to set an interest rate higher than your State allows. In that case you can collect only the same amount you lent at the end of the time for repayment. Remember you are not a bank and private lenders do not have the same rights to lend at the amounts charged by banks or payday loan company’s.
Example – A private individual lending $1,000,000 for five years at 11% interest-only in California can only collect $1,000,000 at the end of five years. Any money paid by the borrower as interest along the way could be tripled under California law and returned to the borrower under CA. statutes.
Check you local laws!
Signing a promissory note does not mean it will be repaid. The borrower can file bankruptcy and be relieved of the debt or force you to go to Court to obtain a Court Judgment that you might
never collect. BE CAREFUL.
If the borrower is a friend, be prepared to lose the friendship. Most friendships are worth more than the interest that can be legally charged. That is why banks and pay day loans were created.