Highlight In Legal California Promissory Notes Forms For Free

?A promissory note is basically an IOU,? says Bill Maurer, director of the Institute for Money, Technology and Financial Inclusion at the University of California, Irvine. ?It's a written statement of a promise to pay a specific sum of money by a specific time. Think of it as an IOU that's legally enforceable.?

You can use a template or create a promissory note online. But before you begin, you'll need to gather some information and make decisions about the way the loan will be structured. First, you'll need the names and addresses of both the lender (or "payee") and the borrower.

Secured promissory notes By assuring that the property attached to the note is of sufficient value to cover the amount of the loan, the payee thus has a guarantee of being repaid. The property that secures a note is called collateral, which can be either real estate or personal property.

How to Write a Secured California Promissory Note Begin by entering the lender's complete information, the current date, the borrower's complete information, the amount of the loan, and the amount of the interest involved in the loan. Choose the method you would like the borrower to repay the balance.

Promissory notes are not usually sold to the general public. Fraudulent promissory notes are sometimes issued on behalf of fictitious companies. Sellers may tell investors the notes are a safe investment since they are guaranteed by insurance companies.

Even legitimate promissory notes involve risks: competition, bad management or severe market conditions can impact the issuer's ability to carry out its promise to pay interest and principal to note buyers.