12Law Arrow 12Law Arrow  Easy Questions  
12Law Arrow 12Law Arrow Instant Legal Documents
 
 
FINANCIAL & MARITAL

Cohabitation Agreement coming soon!
Separation Agreement coming soon!
No-Fault Divorce coming soon!
Bankruptcy coming soon!
 
 

Frequency Asked Questions About Promissory Notes in Zip Code 93435

Frequency Asked Questions About Promissory Notes in Zip Code 93435


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 CA Last Will Create 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 CA Living Will Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Related Articles:
Related Legal Services near Zip Code 93435
Flory, Jan M
1400 Brea Blvd
Fullerton, CA 92835
(714) 525-9998
Attorneys, Child Custody Attorneys, Family Law Attorneys, Divorce Attorneys
Document Preparation Svc Inc
9673 Sierra Ave # F
Fontana, CA 92335
(909) 350-9787
Paralegals, Legal Document Assistance
Coffey and Coffey
1440 N. Harbor Blvd. #500
Fullerton, CA 92835
(714) 880-9753
Traffic Law Attorneys, Criminal Law Attorneys, DUI & DWI Attorneys
Guzman Paralegal Services
18305 Sherman Way
Reseda, CA 91335
(818) 776-9717
Attorneys Referral & Information Service, Paralegals
Srivastav Indu
1440 N Harbor Blvd # 250
Fullerton, CA 92835
(714) 447-9695
Attorneys, Legal Service Plans
VICTOR S.PALACIOS & ASSOCIATES, A PROFESSIONAL CORPORATION
8456 Sierra Ave Suite 205
Fontana, CA 92335
(909) 356-9595
Divorce Attorneys, Malpractice Law Attorneys, Social Security & Disability Law Attorneys, Drug Charg
Personal Injury Law Offices
919 South Wooster St
Los Angeles, CA 90035
(310) 779-9327
Bankruptcy Law Attorneys,  Divorce Attorneys,  Personal Injury Law Attorneys,  Workers Compensation
Gerber David A
2741 Victoria Ave # C
Oxnard, CA 93035
(805) 382-8760
General Practice Attorneys, Attorneys
Clement & Ho
1440 N Harbor Blvd # 900
Fullerton, CA 92835
(714) 449-8440
Elder Law Attorneys, Attorneys
Reed, Nancy E
133 S Main St
Milpitas, CA 95035
(408) 262-7992
Attorneys,  Probate Law Attorneys,  Child Custody Attorneys,  Divorce Assistance,  Family Law Attorn
Aladdin Bail Bonds
8127 Mulberry Ave
Fontana, CA 92335
(877) 765-7888
Bail Bonds, Criminal Law Attorneys, Bail Bond Referral Service, DUI & DWI Attorneys
Community Paralegal Services
9228 Sierra Ave
Fontana, CA 92335
(909) 823-7488
Legal Clinics,  Attorneys,  Paralegals,  Attorneys Referral & Information Service
Elenbaas, Thomas E
211 Imperial Hwy
Fullerton, CA 92835
(714) 871-7100
Attorneys,  Business Law Attorneys,  Civil Litigation & Trial Law Attorneys,  Corporation & Partners
Ross Linda K Atty
1370 Brea Blvd
Fullerton, CA 92835
(714) 680-6456
Attorneys,  Divorce Assistance,  Estate Planning, Probate, & Living Trusts,  Elder Law Attorneys,
Berkley Benjamin H 7148716440
1440 N Harbor Blvd
Fullerton, CA 92835
(714) 871-6440
Attorneys
Kirk Nuzum
3663 Meadowlands Ln
San Jose, CA 95135
(408) 532-6433
Attorneys Referral & Information Service, Legal Clinics, Attorneys
Duron Paul J.
1440 N Harbor Blvd
Fullerton, CA 92835
(714) 487-6405
Child Custody Attorneys,  Attorneys,  Family Law Attorneys,  Divorce Attorneys
The Tax Doctor
16981 Foothill Blvd
Fontana, CA 92335
(909) 829-6300
Paralegals, Notaries Public, Tax Return Preparation, Legal Document Assistance
Madnawat Law Firm
1578 Centre Pointe Drive
Milpitas, CA 95035
(408) 905-6161
Estate Planning, Probate, & Living Trusts,  Civil Litigation & Trial Law Attorneys,  Personal Inju
Pacific Attorney Group
856 S Robertson Blvd
Los Angeles, CA 90035
(323) 666-6066
Personal Injury Law Attorneys, DUI & DWI Attorneys, Malpractice Law Attorneys
Daniel R. Perlman
1400 N Harbor Blvd. Suite 650
Fullerton, CA 92835
(714) 882-5700
Domestic Violence Attorneys, Criminal Law Attorneys, Drug Charges Attorneys
Moerbeek Stanley L-
285 Imperial Hwy Ste 103
Fullerton, CA 92835
(714) 773-5396
Attorneys, Legal Service Plans
June Harris
1440 N Harbor Blvd
Fullerton, CA 92835
(714) 526-5048
Family Law Attorneys,  Tax Attorneys,  Probate Law Attorneys,  Wills, Trusts & Estate Planning Atto
Operini Edward G
16820 Ivy Ave
Fontana, CA 92335
(909) 822-5041
Attorneys, Legal Service Plans
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US