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Finance and corporate

Promissory note template

Promissory note: A promissory note is a short written promise by a borrower to pay a set amount to a lender on demand or by a fixed date.

Last reviewed 6 November 2026 · 5 clauses · General guidance, not legal advice

Upload yours for a review and e-signature, or save it as a team template.

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When to use a promissory note

  • Simple loans that do not need a full loan agreement
  • Deferred payment for a purchase
  • Documenting money owed between businesses

Promissory note template: clause-by-clause outline

Sample starting wording for each clause. Replace the text in [brackets] with your details.

  1. Promise to pay

    For value received, [Borrower] promises to pay [Lender] the sum of [amount].

  2. Interest

    Interest accrues at [x]% per year on the unpaid balance.

  3. Payment date

    The full amount is payable on [date] / in [number] instalments of [amount].

  4. Prepayment

    The Borrower may prepay all or part without penalty.

  5. Default and costs

    If not paid when due, the Borrower will pay reasonable collection costs.

What to check before you sign

  • Does local law treat it as a negotiable instrument with special formalities, such as stamp duty?
  • Is the repayment date unambiguous?
  • Is interest lawful?

Signing formalities: In some countries, including India, promissory notes cannot be signed electronically and need stamp duty.

How to send a promissory note for e-signature

  1. Draft or upload it. Use the outline above with your own wording, upload an existing document, or save it as your organisation’s template.
  2. Check it against your playbook. Points outside your positions are flagged, and approval rules route it to Legal when needed.
  3. Send it by email. Signers get a plain-language review and a secure link, sign on any device in the order you set, and can suggest changes as tracked changes.
  4. Keep the signed PDF. Everyone receives it with a certificate of completion, and key dates go to Upcoming with reminders.

Promissory note template: frequently asked questions

Is a promissory note legally binding?

Yes, when properly made. Some countries treat promissory notes as negotiable instruments with specific rules on stamping and form.

Can a promissory note be signed electronically?

Not everywhere. Some laws, including India’s IT Act, exclude negotiable instruments other than cheques from electronic signing.

Is an electronically signed promissory note legally binding?

Often, but not always. In some countries, including India, promissory notes cannot be signed electronically and need stamp duty. econtracts.ai shows the rules for the contract’s governing law before you send it.

Can I get a promissory note I received reviewed?

Yes. Upload it to econtracts.ai and you get a plain-language review: key dates, money and points to check, each quoting the clause it comes from.

Related contract templates

Loan agreement templateLoan agreementPurchase agreement templatePurchase agreementSettlement agreement templateSettlement agreement

This outline is a starting point for discussion, not legal advice, and it is not a complete contract. Laws differ by country and sector; have a qualified lawyer review contracts that matter.