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A Family Member Promissory Note is a promise of payment from one family member (Borrower) to another family member (Lender). This promise specifies the payment of the sum of money plus any interest that may accrue on the loan over a stipulated period. Using our free family member promissory note template sample will minimize errors and secure your loans.

Family Member Promissory Note Template

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Image 1

Prepared for:

​[Borrower.FirstName][Borrower.LastName]​

​[Borrower.Company]​

​Created by:

​[Lender.FirstName][Lender.LastName]

​[Lender.Company]​

​[Borrower.FirstName][Borrower.LastName]​

​[Borrower.StreetAddress][Borrower.City][Borrower.State]​

​[Borrower.Country][Borrower.PostalCode]​

​[Borrower.Email]​

​[Borrower.Phone]​

​[Document.CreatedDate]​

(Family Member's Name)

(Family Member's Address)

(City, State, ZIP Code)

Family Member Promissory Note

This Family Member Promissory Note ("Note") is issued to [Borrower.FirstName][Borrower.LastName], referred to as the "Borrower," by [Lender.FirstName][Lender.LastName] referred to as the "Lender," to formalize the terms and conditions of the loan agreement.

It’s important to note that this is a promissory note intended for family members. Currently, the law doesn’t levy taxes on money lent to family or close friends, so adding the title to the document will allow you to exempt certain taxes such as gift tax (for giving money to family) or taxes on loans to strangers.

2. Loan Payment

Loan Amount: (Enter loan amount in words and numbers)

Interest Rate: (Enter interest rate, if applicable)

Each state has a maximum allowed interest rate within its jurisdiction, so it’s advisable to check our state-specific promissory note templates to create a note under the jurisdiction in which you’re located.

2.1 Payment periods

Payments on the loan will be made in equal installments starting on (FirstPayment.Date). These will continue regularly for periods (Period.Payment) until the debt is completely paid off.

2.2 Payment due dates

In turn, the document must be paid on (Date.PaymentDay). This will be counted as the first day of each period, and both the principal amount and interest will be taken into account.

2.3 Application of payment

In addition, each time the Borrower makes a payment, it will be deducted from the interest at the first stay. Upon completion of the payment of such amount, the remaining balance will be taken as payment of the principal amount.

This is an optional clause for a family member promissory note template. However, it’s a good idea to include it to avoid problems when stipulating where the payment has been debited.

2.4 Prepayment clause.

The Borrower may make the payment in whole or any part of the principal amount at any time. This will not generate any problems against you as long as you pay the previously agreed interest.

This clause is usually added within the family member promissory note to indicate that the loan can be repaid if you have the money early.

3. Security

3.1 Loan Acceleration

In case the borrower is (DuePayment.Days) in arrears in the payment of any previously agreed installment, the Lender may declare the total amount as unpaid and demand it in full. This also includes the interest previously agreed upon in the contract.

3.2 Collateral

For the purposes of this document, the need for collateral will not be considered since this is a family loan.

Although not widely used in the case of promissory notes for family members, collateral is an excellent way to provide security for a debt. The Borrower places an asset as security for payment. In the event of default at some point, the Lender can take the property as its own.

4. Signatures

By signing below, the Lender and the Borrower acknowledge and agree to the terms and conditions outlined in this Family Member Promissory Note.

This promissory note was signed on the date of (Signing.Date) by both parties, each receiving an original copy of the document.

​

Signature
MM / DD / YYYY

​[Lender.FirstName][Lender.LastName]​

​

Signature
MM / DD / YYYY

​[Borrower.FirstName][Borrower.LastName]​

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FAQ: Family Member Promissory Note Template

  • A family member promissory note is typically used when a loan is being made between family members, such as between siblings, parents and children, or other close relatives. This document is used as a promise of payment by one family member to another, in which they promise to pay an amount of money owed and the interest accrued thereon.

  • To create a promissory note for a family member, we must include in a document the following requirements:

    • Names of the parties

    • Amount to be paid back

    • Interest

    • Payment schedule

    • Consequences of non-payment

    • Any additional security clauses deemed necessary.

  • You can edit, sign and download a free family member promissory note template in PDF at PandaDoc. Make sure to review and customize your template to ensure it aligns with your specific requirements and complies with the laws and regulations of your jurisdiction.

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Family Member Promissory Note Template

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Easily document loans between relatives with our customizable Family Member Promissory Note Template.

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