Download free promissory note template
A promissory note is a legally binding document between two parties: a lender and a borrower. These documents are common both between private individuals and in connection with loans from banks or mortgage lenders.
Although banks and mortgage lenders often refer to promissory notes as loan documents, both terms refer to a written agreement for a loan. The term "promissory note" is also used, but is less common.
At the bottom of this page you will find a template for a promissory note that we recommend using as a starting point, unless you already use a template.
What is a promissory note?
A promissory note is a legal document that details a loan and all relevant information about it. It serves as proof of both the loan's origination and the agreed terms, such as interest, repayment and repayment. Promissory notes are often also referred to as loan documents.
What does a promissory note contain?
There are no formal requirements for what a promissory note must and can contain, but the promissory note should contain:
- The size of the loan
- The identity of the lender and borrower (full name, address, CPR/CVR number).
- Interest rate information and accrual frequency.
- Conditions in case of loan default.
- The date the loan was taken out.
- Installment size, installments, and frequency.
- Signatures of the parties.
It is crucial that the document clearly states a debt relationship to avoid the tax authorities considering the loan as a gift. Without the signatures of both parties, the document is not legally binding.
Therefore, always make sure that the document is signed by both parties - without signatures, the document is not legally valid.
If there is any other relevant information that the lender(creditor) or borrower(debtor) considers relevant to the loan, such as the currency in which the loan is settled or similar, this should also be included
At the bottom of the page you will find our template for a promissory note that also includes the above points.
Why do I need a promissory note?
A promissory note, also known as a loan document, acts as a security for both lender and borrower. It ensures that the loan is taken out, settled and repaid according to the agreed terms.
Without a promissory note, both parties risk lacking the necessary documentation for the loan agreement, which can lead to misunderstandings or conflicts over the terms of the loan.
A promissory note accurately documents the loan amount, interest rate, repayment amounts and how often these installments are to be made. This ensures clarity and mutual understanding between the parties.
In addition, the promissory note serves as a legal foundation in the event of debt collection proceedings if the loan is not settled as agreed. By having a promissory note, both parties have a firm legal basis to rely on.
Example of a promissory note
There are no formal legal requirements for the design of a promissory note. This means you have the freedom to design, write and structure the promissory note to suit your needs. However, we recommend that you base your promissory note on the key points mentioned earlier and include any additional information that the lender and borrower deem relevant.
In its simplest form, a promissory note can be so concise that it fits on a single A4 sheet of paper.
In the section below, you'll find a link to our free promissory note template, which provides an example of how a promissory note can be drafted.
Debt Letter Template
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If you don't yet have a promissory note, it's a good idea to start with a template.
At Collectia, we have created a template that you can use for your promissory note, promissory note or loan document. Feel free to customize, use and modify the template to meet your needs.
Please note that it is not allowed to share the template with anyone other than your borrower. If you wish to share the template, you are encouraged to refer interested parties to this page to download their own copy.
We hope you enjoy using the template for your next promissory note.
Disclaimer: The content of this article/template is for informational purposes only and should not be construed as professional legal advice.
