A note payable agreement is a legally binding document that outlines the terms and conditions of a loan between a borrower and a lender. This agreement is important as it protects both parties while ensuring that the loan is repaid on time.
Here is a sample note payable agreement that you can use as a reference.
Note Payable Agreement
This Note Payable Agreement (“Agreement”) is made and entered into as of [insert date], by and between [insert borrower’s name and address] (“Borrower”) and [insert lender’s name and address] (“Lender”).
Loan Terms
1. The Borrower agrees to borrow [insert loan amount] (“Loan Amount”) from the Lender.
2. The interest rate shall be [insert interest rate] percent (%).
3. The Loan Amount shall be paid back in [insert number of payments] equal installments of [insert payment amount] each.
4. The first installment shall be due on [insert due date] and continue every [insert number of days/months] thereafter until the Loan Amount is fully repaid.
Collateral
1. The Borrower shall put up [insert collateral] as collateral for the Loan Amount.
2. If the Borrower defaults on any payment, the Lender has the right to take possession of the collateral.
Representations and Warranties
1. The Borrower represents and warrants that he/she has the authority to enter into this Agreement and that the information provided in this Agreement is true and accurate.
2. The Lender represents and warrants that he/she has the authority to lend the Loan Amount to the Borrower.
Default
1. If the Borrower fails to pay any installment, the entire Loan Amount shall become immediately due and payable.
2. If the Borrower fails to pay any installment, the Lender shall have the right to take possession of the collateral.
Governing Law
This Agreement shall be governed by the laws of [insert state/country].
Notices
All notices under this Agreement shall be in writing and shall be considered served if delivered personally, sent by certified mail, or sent by email to the following addresses:
Borrower:
[insert borrower’s address]
Lender:
[insert lender’s address]
Final Thoughts
A note payable agreement is an important legal document that protects both the borrower and the lender. This sample note payable agreement can be used as a reference to create your own agreement. It is important to consult with a lawyer before finalizing the agreement to ensure that it adheres to local laws and regulations.