Skip to main content

e-Sign with PandaDoc

Use this free unsecured promissory note template as an individual or business when applying for a financial loan from a lending agency, investor, friend, or family.

Please note, a promissory note isn’t the same as a loan agreement. It’s a simple way to outline who is lending money from whom and how they agree to repay the loan. Promissory notes can be attached to a loan agreement or used as an informal way to outline a lending agreement.

Unsecured Promissory Note Template

Image 1

Prepared for:

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

​[Borrower.Company]​

​Created by:

​[Lender.FirstName][Lender.LastName]

​[Lender.Company]​

Borrower:

​[Borrower.FirstName][Borrower.LastName] of [Borrower.StreetAddress], [Borrower.City], [Borrower.State], [Borrower.PostalCode]​

Lender:

​[Lender.FirstName][Lender.LastName] of [Lender.StreetAddress], [Lender.City], [Lender.State], [Lender.PostalCode]​

Principal amount: $(insert dollar amount of loan)

The principal amount should be the full amount that is being lent without any interest. The accruement of interest is stated later in this promissory note template.

Date:[Document.CreatedDate]​

This Unsecured Promissory Note (“Note”) is a binding legal document by and between Borrower and Lender. By signing it, both parties agree to uphold, enforce, and abide by the terms of this document in its entirety.

Terms & Conditions

The Lender agrees to loan the balance indicated above to Borrower. Borrower agrees to repay this amount, plus interest in the amount of (insert interest rate)% per month from the date stated above.

The IRS is responsible for setting the minimum and maximum applicable federal rate (AFR) for the interest charged on private loans. These are usually subdivided into short, medium, and long terms. The minimum interest rate for short-term loans is 1.26%, with medium loans at 1.87% and long-term loans at 2.25%. Each state also has a maximum interest limit which you can adjust when filling in your unsecured promissory note.

If the Borrower is in default under this Note or is in default under another provision of this Note and such default is not cured within the minimum allotted time by law after written notice of such default, then Lender may, at its option, declare all outstanding sums owed on this Note to be immediately due and payable.

The Borrower shall remain liable for the balance due while accruing interest at the maximum rate allowed by law.

In an unsecured note, the borrower doesn’t usually specify any collateral for the loan amount. As such, once debt collection processes are started, the debt collectors will first try to work on a new payment plan with the borrower, and if this doesn’t work, they’ll look at all available assets that can be used to cover the outstanding amount.

Interest & Payments

Borrower agrees to make periodic payments towards the total amount of the loan plus interest accrued, indicated in the table below:

Payment Date:

Payment Amount:

(MM/DD/YYYY)

(Payment Amount)

(MM/DD/YYYY)

(Payment Amount)

(MM/DD/YYYY)

(Payment Amount)

If the Lender receives any installment payment more than (insert number) days after the date it is due, a late payment fee of $(insert dollar amount) shall be payable with the scheduled installment payment along with any default interest due.

This note will be repaid in full, including any interest and late fees, no later than (MM/DD/YYYY).

The Borrower has the right to prepay all or any part of the principal amount of this Note, together with accrued and unpaid interest thereon, at any time without penalty or premium of any kind.

Holder reserves the right to enforce this promissory note as payable in full in each of the following conditions:

  1. Failure to make payment by any of the dates in the table above

  2. Borrower’s breach of any other aspect of this promissory note

  3. Death, incapacitation, or bankruptcy of Borrower

If the Borrower fails to pay the note in full on the due date or has failed to make an installment payment due within 15 days of the due date, the unpaid principal shall accrue interest at the rate of (insert number) percent per year OR the maximum rate allowed by law, whichever is less, until the Borrower is no longer in default.

Borrower agrees to be solely responsible for all costs, expenses, and expenditures incurred by Lender in enforcing the terms of this promissory note, including, without limitation, fees from attorneys and collection agencies.

Any legal costs the Lender incurred by enforcing this note as a result of any default by the Borrower will be added to the principal then outstanding and shall be due and payable to the Lender immediately upon demand of the Lender.

Governing Laws

This promissory note and the interpretation of its terms shall be governed by and construed per the laws of the State of (insert state) and subject to the exclusive jurisdiction of the federal and state courts located in (insert county), (insert state).

To ensure that all parts of your note remain valid, check any limitations or regulations for your state. Certain states may impose restrictions such as minimum and interest rates or maximum loan amounts for private agreements.

Waiver

The Borrower and all sureties, guarantors, and endorsers waive presentment for payment, a notice of dishonor, protest, and notice of protest.

Successors and Assigns

This Note will inure to the benefit of and be binding on the respective heirs, executors, administrators, successors, and permitted assigns of the Borrower. This Note prohibits the

Borrower from assigning their rights or delegating its duties without the Lender’s prior written consent. This Promissory Note may not be transferred without the express written consent of the Lender.

Joint and Several Liability

If there is more than one Borrower of this Note, each Borrower shall be jointly and severally liable.

Amendment

No verbal or other agreements shall modify or affect the terms of this Note. Neither Borrower nor Lender may amend or modify this Note except in writing.

Severability

If any part or all of this note is found to be invalid or unenforceable, the remaining provisions will remain valid.

Notifications

This unsecured promissory note template only becomes legally binding once both parties have signed, dated the document and agreed to its terms.

Any notice or communication under this Note must be in writing and sent via one of the following options:

​[Lender.Phone], [Lender.Email]​

​[Lender.StreetAddress], [Lender.City], [Lender.State], [Lender.PostalCode]​

IN WITNESS WHEREOF, each of the Parties has executed this Promissory Note, both Parties by its duly authorized officer, as of the day and year set forth below.

​[Lender.Company]​

​

Signature
MM / DD / YYYY

​[Lender.FirstName][Lender.LastName]​

​[Borrower.Company]​

​

Signature
MM / DD / YYYY

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

Useful resources

Featured Templates
Sales Proposals
NDA Agreements
Operating Agreements
Service Agreements
Sales Documents
Marketing Proposals
Rental and Lease Agreements
Quote Templates
Business Proposals
Agreement Templates
Purchase Agreements
Contract Templates

FAQ: Unsecured Promissory Note Template

  • An unsecured promissory note is used when an individual wants to borrow money but doesn’t want to provide specific assets as collateral or security. In these cases, the lender will usually base the decision to lend money on the borrower’s credit score and affordability. Ensure that you remove any mentions of security or collateral when drafting your unsecured promissory note sample.

  • The difference between secured and unsecured promissory notes lies in the collateral provided. With a secured promissory note, the borrower will clearly state what assets they provide as collateral for the agreement. This is usually property or other high-valued assets. 

    With an unsecured promissory note, the borrower won’t specify any collateral. In this case, if the borrower defaults on the loan, the lender can start debt collection processes to collect the outstanding amount.

  • You can download a free unsecured promissory note template at PandaDoc which contains all the required fields. PandaDoc has numerous free templates, including unsecured promissory notes, that you can use when lending money from investors, family, or friends.

Disclaimer

Materials (e.g. templates, educational articles, blog posts and informational content), made available through PandaDoc, including via any integrations, connectors, extensions, plugins, or third-party AI platforms (e.g. ChatGPT, Claude, or similar tools) are for general information purposes only and are provided "as is." These materials do not constitute legal, regulatory, or compliance advice and should not be construed as such. It is your responsibility to ensure materials meet your specific legal requirements. Consult a qualified attorney licensed in your jurisdiction before relying on these materials. PandaDoc disclaims all warranties, express or implied, including fitness for a particular purpose or non-infringement.

Related templates

Promissory Note Template California

Promissory Note Template California

Secure your loans in California using our free Promissory Note Template for California.

Secured Promissory Note Template

Secured Promissory Note Template

Complete our free secured promissory note template to create a legally binding promise to repay a loan.

Family Member Promissory Note Template

Family Member Promissory Note Template

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

Promissory Note Template Ohio

Promissory Note Template Ohio

Ensure a secure investment when lending money to friends or family with a promissory note for Ohio.

PandaDoc
TemplatesPromissory Note
Close
PandaDoc
TemplatesPromissory Note
Close

available

e-Sign with PandaDoc

Unsecured Promissory Note Template

Used 5,011 times

AI BadgeAI assistant included

This unsecured promissory note template lets you protect your investment if you loan money to a business, friend, or family member.

Use this template — free
Use this template — free

Care to rate this template?

Your rating will help others.

Rate this template

Thanks for your rate!

Template preview