Easy Questions  
Free Legal Documents

Frequency Asked Questions About Promissory Notes in Adkins, TX

Frequency Asked Questions About Promissory Notes in Adkins, TX


Promises make debt, and debt makes promises.
 
- Dutch Proverb


A promissory note is used to record the financial details of personal loans, business loans, and real estate transactions. It is a legally binding contract which can be used in a court of law if the borrower defaults on the loan.


Personal promissory notes are the most common form of note payable and can be used when lending or borrowing money from friends or family, or to document the intended purchase of personal belongings such as jewelry, appliances, or vehicles. Depending on the amount of the loan, the lender may also request some sort of collateral to back the note.

When drafting the note it should clearly state how much the loan is for, the amount of interest being charged, and the dates which payments should be made. Most states have laws regarding the amount of interest lenders can charge.

When borrowing money from a bank or lending institution, a promissory note is almost always required. If the borrower defaults on the loan the lender has the right to demand full payment of the note. If the lender is unable to collect on the note they can place a lien against real property owned by the borrower or have their wages garnished. If this occurs, it will have a negative impact on the borrower's credit report.

Promissory notes that are considered "unsecured". This means that if the borrower defaults on the loan it is more difficult for the lender to collect. Although lenders can file a lien against the property and take legal action against the borrower, collection can be a lengthy and expensive process with no guarantee for repayment.


Why use a promissory note? Even though a lender trusts the borrower in good faith that he will be repaid, it is always good practice to get it in writing. Oral agreements can be misinterpreted or misremembered. Promissory notes are clear about the interest rates, due dates, late payment penalties, and other possible terms. A promissory note is also solid evidence that a loan has taken place, in case there is a dispute.

Types of Promissory Notes

Promissory notes come in a variety of types which may include:

• Balloon note. A promissory note that requires smaller payments early in the term of the loan and a large payment at the end of the loan term.

• Demand note. This type of promissory note has no fixed timetable for the payment of loan. It requires full payment of the loan upon demand by the lending party.

• Secured or unsecured promissory note. A secured note includes collateral which may be claimed by the lender upon non-payment. One of the classic examples is the mortgage loan where the home is provided as collateral is provided in case the loan is not paid.

• Master promissory note. Refers to the series of loans that can be made using this type of promissory note over an extended period of time.

Some people may feel offended when asked for a written promissory note. It is however, important to have a written agreement when dealing with personal loans because the relationship can be damaged when disagreements arise. Business loans on the other hand, can be easier to get in writing because it is less personal.


FAQ's on Promissory Note

• What is a promissory note?

A promissory note is evidence of a loan agreement that contains the terms of the agreement for the loan. This note also contains the promise to pay the loan on the agreed date. This promissory note or note payable can be used for a personal loan or commercial transactions.

• Who must sign the promissory note?

A loan agreement is signed by both parties but only the borrowing party needs to sign a promissory note. A witness need not sign but the note can be notarized as evidence that the borrower did sign the document.

• What is a secured promissory note?

Collateral, such as an interest in the borrower's property, is included in the promissory note. In case of a default in payment, the property can be sold to pay the lender.

• What is balloon promissory note?

This is a type of installment note where a series of smaller installment payments are made and a large payment is required towards the end of the loan.

• What is the maximum interest rate I can charge the borrower in a promissory note?

Usury laws dictate the maximum interest rates that can be charged by the lender to the borrower. This varies by state and local laws on interest rates should be checked.

• What can I do if there is a default on the note payable by the borrower?

You may choose to sue the borrower in small claims court. Promissory notes can be used as evidence of the loan default that can be use in a lawsuit related to breach of contract. A cognovits note provision can be included in which the borrower waives any defenses that could be raised by the lender.

• What is a master promissory note?

A master promissory consolidates multiple loans. An example of a master promissory note is a student loan where one can make multiple loans covering the time frame specified in the promissory note outline.
 
Personalize & Print a Free TX Last Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Personalize & Print a Free TX Living Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Related Articles:
Related Legal Services near Adkins, TX
Granger & Mueller
605 W 10th St
Austin, TX 78701
(512) 474-9999
Attorneys, Criminal Law Attorneys
Mahler, Rick L.
719 Scott Ave Suite 616
Wichita Falls, TX 76301
(940) 723-9999
Attorneys,  Criminal Law Attorneys,  DUI & DWI Attorneys,  Family Law Attorneys,  Divorce Attorneys
The Dashner Law Firm
929 E Esperanza Ave # 25
McAllen, TX 78501
(956) 683-9997
General Practice Attorneys, Attorneys, Legal Service Plans
Greenway John W
400 W 15th St
Austin, TX 78701
(512) 452-9996
Attorneys
Stephen J Davis
701 Brazos St
Austin, TX 78701
(512) 479-9995
General Practice Attorneys, Attorneys, Legal Service Plans
Flores Romeo M
555 N Carancahua St Ste 1200
Corpus Christi, TX 78401
(361) 881-9990
Arbitration Services,  Attorneys,  Mediation Services,  Legal Service Plans
Dettman, Mark H
415 W Wall St
Midland, TX 79701
(432) 683-9990
Estate Planning, Probate, & Living Trusts,  Attorneys,  Investment Advisory Service,  Financial Se
Nelson Susan I
215 Mary Ave # 310
Waco, TX 76701
(254) 754-9990
General Practice Attorneys, Attorneys, Legal Service Plans
Carr Emily Ann
407 E 4th St
Tyler, TX 75701
(903) 533-9986
Attorneys
Sheets Jeff
1213 Avenue K
Lubbock, TX 79401
(806) 771-9985
General Practice Attorneys, Attorneys, Legal Service Plans
Scott, Roy
407 N Big Spring St Ste 200
Midland, TX 79701
(432) 570-9979
Attorneys, General Practice Attorneys, Legal Service Plans
Vincent Gonzalez
606 N Carancahua St Suite 506
Corpus Christi, TX 78401
(361) 883-9966
Attorneys,  Legal Service Plans,  Drug Charges Attorneys,  Criminal Law Attorneys,  Federal Law Atto
Williams Allan L
1100 West Ave
Austin, TX 78701
(512) 477-9959
General Practice Attorneys, Attorneys
Forsythe Andrew J
1100 West Ave
Austin, TX 78701
(512) 477-9959
Attorneys, Legal Service Plans
Stern Rebecca L
316 W 12th St, Ste. 402
Austin, TX 78701
(512) 481-9950
Attorneys,  Family Law Attorneys,  Estate Planning, Probate, & Living Trusts,  Arbitration & Media
Schmidt Michael B
555 N Carancahua St # 1550
Corpus Christi, TX 78401
(361) 884-9949
Attorneys,  General Practice Attorneys,  Legal Service Plans,  Bankruptcy Law Attorneys
Minna Lynn
3102 Maple Ave # 220
Dallas, TX 75201
(214) 528-9948
General Practice Attorneys, Attorneys
Dan Shelley
305 W 13th St
Austin, TX 78701
(512) 478-9937
General Practice Attorneys, Attorneys
Strauss Lisa
4545 Bissonnet St
Bellaire, TX 77401
(713) 449-9922
Attorneys, DUI & DWI Attorneys, Legal Service Plans, Traffic Law Attorneys
Vier Chad
207 E Frank Ave # 100
Lufkin, TX 75901
(936) 632-9922
Accident & Property Damage Attorneys, Attorneys, Legal Service Plans
CASTILLO DAMIAN - ATTORNEY
407 N Big Spring St
Midland, TX 79701
(432) 570-9919
Attorneys
Bradley David
500 S Taylor St Suite 900
Amarillo, TX 79101
(806) 376-9914
Attorneys
Spencer Jamie
812 San Antonio St
Austin, TX 78701
(512) 472-9909
Attorneys
Roberto Puente
602 N McColl Rd
McAllen, TX 78501
(956) 618-9904
Attorneys, General Practice Attorneys, Legal Service Plans, Immigration & Naturalization Consultants
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US