Free Promissory Note

Free Promissory Note

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Create Your Free
Promissory Note

  1. Answer a few simple questions
  2. Email, download or print instantly
  3. Just takes 5 minutes

Promissory Note

Create your Free Promissory Note

Create your Free Promissory Note

Frequently Asked Questions

What is a lump-sum payment?In a lump-sum payment, the borrower repays the lender with a single one-time payment at the end of the note term.What is a specific payment amount?Under a specified payment plan, the borrower will pay the lender a specific amount of money at regular intervals.

If any outstanding balance remains at the end of the term, it will be paid then.
What is a principal & interest payment?Under a principal + interest payment plan, the borrower will make regular payments that count towards both the principal amount and the interest as it is compounded.

At the end of the term, there will be no outstanding balance. For this reason, you can only choose a principal + interest payment plan when the promissory note has a fixed term length.
What is an interest only payment?Under an interest only payment plan, the borrower will make regular payments that only count towards the accumulated interest. No portion of the payment will go towards the original principal amount.

At the end of the term, the borrower will repay the principal amount along with any unpaid interest.

Your Promissory Note

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__________ of __________, __________, ______, __________ (the "Borrower")


__________ of __________, __________, ______, __________ (the "Lender")

Principal Amount:      $_____________ CAD

  1. FOR VALUE RECEIVED, The Borrower promises to pay to the Lender at such address as may be provided in writing to the Borrower, the principal sum of $_____________ CAD, with interest payable on the unpaid principal at the rate of _________ percent per annum, calculated yearly not in advance.
  2. This Note will be repaid in full on May 28th, 2016.
  3. At any time while not in default under this Note, the Borrower may pay the outstanding balance then owing under this Note to the Lender without further bonus or penalty.
  4. All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by the Lender in enforcing this Note as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.
  5. If any term, covenant, condition or provision of this Note is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Note will in no way be affected, impaired or invalidated as a result.
  6. This Note will be construed in accordance with and governed by the laws of the Province of Alberta.
  7. This Note will enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Borrower and the Lender.  The Borrower waives presentment for payment, notice of non-payment, protest and notice of protest.

IN WITNESS WHEREOF the Borrower has duly affixed their signature under seal on this 28th day of May, 2016.

this 28th day of May, 2016.




Promissory Note

A Promissory Note, also referred to as an IOU, is a contract documenting a financial promise between two parties. The borrower (the person who received a loan) promises to pay back a sum to the lender, outlining when and how they will return the borrowed amount.

A Promissory Note is often used when the amount is fairly small or the agreement is straightforward.

Terms included in a Promissory Note:

  • The principal amount of the note, whether interest will be charged, and when it is due.
  • Payment dates, penalties for default, and collateral (if any).
  • Contact information for each party and if they are an individual or a corporation.

What is a Payment Default?

A payment default is when a borrower fails to make a payment on time, as per the agreed upon schedule. It is up to the lender to decide what payment defaults will be, and how to implement them. If a borrower misses too many payments, and provided collateral, the lender may (after taking the issue to court) seize the collateral in question in order to make up for some or all of the remaining amount due.

How do I Create a Payment Plan?

How you create your payment plan depends on the amount lent, and when you wish it to be paid in full. Most people choose to allow for monthly payments to be made on a specified day of the month. Make sure that the amount due is affordable for both the borrower and the lender, as payments that are either too high or too low could cause issues for both parties.

When do I Need a Promissory Note?

Promissory Notes, or IOUs, are generally recommended for people who have either borrowed or lent a sum of money. While you may not want to provide an IOU for the price of a coffee, a Promissory Note should be used for anything that will require payments over time or that cannot be paid back right away.

Enforcing a Promissory Note:

To enforce a Promissory Note in the event of a missed payment or loan default, you'll need to:

  • Gather all documentation of the loaned amount and the agreement.
  • Get in touch with the borrower and request the amount due.

If the borrower does not respond, your next steps would be to:

  • Contact a lawyer and request that they provide a letter of collection to the borrower.
  • Take legal action against the borrower and enforce the court's decision once it has been made.


  • Attempt to collect through a third party, such as a bank or other collection agency.
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