Free Promissory Note

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Free Promissory Note

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  2. Email, download or print instantly
  3. Just takes 5 minutes

Promissory Note



Frequently Asked Questions
When should collateral be used?Collateral is an asset or property offered by the borrower to secure repayment of a loan.

Securing the Promissory Note with collateral allows the lender to seize the asset as compensation if the borrower fails to make payments. It's most useful when there is a high risk the borrower will default or there is a substantial amount being loaned.

If the loan is not secured with collateral, the lender risks losing the amount loaned if the borrower is unable to repay.
Yes, it is a good idea for the lender to register their interest in the collateral on the Personal Property Securities Register (PPSR). Registering their interest gives the lender a better chance of recovering any unpaid loan amounts if the borrower defaults. The lender can register their interest on the PPSR online.

If the collateral being used is land, a house or other building, or a ship longer than 24 metres the lender's interest cannot be registered on the PPSR.

Your Promissory Note

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Promissory Note Page of
Page of

(this "Note")




__________ of ______________________________________ (the "Borrower")


__________ of ______________________________________ (the "Lender")

Principal Amount:      S$_____________

  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 S$_____________ SGD, without interest payable on the unpaid principal, beginning on 24 September 2023.
  2. This Note will be repaid in full on 24 September 2023.
  3. The Borrower shall be liable for all costs, expenses and expenditures incurred including, without limitation, the complete legal costs of the Lender incurred by enforcing this Note as a result of any default by the Borrower and such costs will be added to the principal then outstanding and shall be due and payable by the Borrower to the Lender immediately upon demand of the Lender.
  4. 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.
  5. This Note will be construed in accordance with and governed by the laws of Singapore.
  6. 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 parties have duly affixed their signatures under seal

this ________ day of ________________, ________.




this ________ day of ________________, ________.




Last updated April 26, 2022

What is a Promissory Note?

A Promissory Note documents a borrower’s legally binding promise to pay back a specific sum of money to a person or company.

The Promissory Note will spell out the debt repayment's terms and conditions, such as:

  • Loan amount
  • When and how the loan will be repaid
  • Collateral
  • Interest on late payments.

What’s the difference between Secured and Unsecured Promissory Notes?

An Unsecured Promissory Note is one in which the borrower provides only a written promise to repay a loan.

A Promissory Note becomes secured when the borrower provides collateral in exchange for the loan. The lender can then sell the collateral to recoup the borrowed money if the borrower fails to repay the loan.

However, some types of collateral (e.g., intellectual property rights) require registration under the Companies Act by companies in Singapore. Failing to register this collateral within 30 days of creating the agreement will make gaining possession of the collateral unenforceable. Check Section 131(3) of the Companies Act to see if you need to register the collateral in your Promissory Note.

Both secured and unsecured Promissory Notes are legally binding.

Why should I use a Promissory Note?

Writing a Promissory Note is valuable because it's a legally binding and enforceable agreement between a borrower and a lender. Having a written agreement can reduce the risk of any confusion regarding the loan in the future, and it keeps both parties honest.

For example, with a Promissory Note, the lender can't claim that the sum of money was greater than it actually is. The borrower also can't deny that there ever was a loan. If a dispute goes to court, the note is evidence of an agreement.

What makes a Promissory Note invalid?

There are a few ways a Promissory Note becomes invalid:

  • Amendments: Both parties must sign off on any changes to the original agreement.
  • Losing the original version: Even if amendments are made to the agreement, the lender should keep a copy of the original version to help prove the new agreement’s legitimacy.
  • Missing key details: A Promissory Note must include the payment amount and schedules, interest rates, and both parties' signatures.
  • Unclear terms: A court needs to be able to interpret the agreement to enforce it. LawDepot’s template can help you clearly outline your agreement’s terms.

How do I create a Promissory Note?

You can easily create a Promissory Note by filling out LawDepot's questionnaire. Using our template will ensure you complete the necessary steps:

1. Provide each party’s details

Start your Promissory Note by providing the lender's and the borrower's full names and addresses. Also, specify whether each party is an individual or a company.

2. Outline the Promissory Note’s terms

Provide information regarding the following terms in your Promissory Note:

  • Loan amount: The amount of money the borrower is receiving from the lender.
  • Interest rate: If the lender is charging interest, state the percentage of interest and how often it will be compounded (i.e., monthly, annually, or every six months).
  • Loan date: The date the borrower will receive the loan from the lender.
  • Repayment: The method the borrower will use to repay the loan (i.e., a single payment versus regular payments). If it's in regular payments, specify if all the payments will be equal, the frequency, the first and last payment dates, and whether the payments will go towards both the interest and original loan amount.

3. State if the Promissory Note includes collateral

A borrower can offer a lender collateral (i.e., assets or property) as security for a loan. If the borrower doesn't uphold their end of the agreement, the lender takes permanent possession of the collateral as compensation for the loan.

If your Promissory Note includes collateral, describe the property the borrower is using as collateral. Also, state if the lender will retain ownership of the property until the borrower makes the final payment.

4. State late payment penalties

State if the lender will charge an interest rate as a late penalty. 

If there's already an interest rate on the loan amount, specify the new interest rate after the increase.

5. Include any relevant additional information

Our template allows you to include up to eight additional clauses that our questionnaire might not have covered. The clauses will appear precisely as you write them, so we recommend writing in plain language to help reduce the risk of confusion. A Promissory Note is only valid if the terms can be interpreted.

6. Sign the document

Both parties need to sign the Promissory Note for it to be enforceable. The document will have two blank spaces at the bottom for signatures once the questionnaire is completed.

A space for a witness's signature can also be provided. Witnesses aren’t required to make the note legally binding, but they can help strengthen the evidence of a binding agreement in the event of a dispute.

Is a Promissory Note a negotiable instrument?

Yes, a Promissory Note is a negotiable instrument.

A negotiable instrument is a document that promises a payment of money to another party.

What is a Promissory Note in real estate?

In real estate, a Promissory Note is a document that contains the details of a mortgage loan. It ensures a borrower will repay their mortgage loan by a specific date.

In this context, Promissory Notes are usually called mortgage notes or mortgage Promissory Notes.

Related Documents

  • Loan Agreement: Establish the terms of a loan as agreed upon between a borrower and lender.
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