Best examples of promissory note examples with specific terms

Real-world examples of promissory note examples with specific terms

Let’s skip the theory and go straight into how these notes actually look. When people search for examples of promissory note examples with specific terms, they usually want to see how to phrase things like:

• Exact interest rates
• Payment due dates
• Late fees and grace periods
• Collateral descriptions
• Default and acceleration language

So we’ll walk through several realistic scenarios and show the kind of wording that typically appears in a properly structured note.

Example of a simple personal loan note (fixed interest, monthly payments)

This is the classic “I loaned my friend money” situation. No collateral, just clear terms.

Scenario
Lender: Maria Lopez
Borrower: Jason Reed
Principal: $3,000
Interest: 5% per year, fixed
Repayment: 24 equal monthly payments
Jurisdiction: California

Sample clause language:

1. Promise to Pay
For value received, the undersigned Borrower, Jason Reed ("Borrower"), promises to pay to the order of Maria Lopez ("Lender") the principal sum of Three Thousand Dollars ($3,000), together with interest on the unpaid principal balance at the fixed rate of five percent (5.00%) per annum.

2. Payment Schedule
Borrower shall repay this Note in twenty-four (24) equal monthly installments of One Hundred Thirty-One Dollars and Ninety-Two Cents ($131.92), due on the first (1st) day of each month, beginning March 1, 2025, until paid in full on or before February 1, 2027.

3. Late Charges
If any payment is not received within ten (10) calendar days after its due date, Borrower shall pay a late charge equal to five percent (5%) of the overdue payment.

This is one of the best examples for a straightforward, unsecured personal note. No collateral, no balloon payment, just a clean amortized schedule and a modest late fee.

Example of a family loan with 0% interest and clear documentation

A lot of people assume family loans don’t need paperwork. That’s how relationships end up in court. Here’s an example of a simple, interest-free note that still has very specific terms.

Scenario
Lender: Parent
Borrower: Adult child
Principal: $1,500
Interest: 0%
Repayment: 10 monthly payments of $150

Sample clause language:

1. Promise to Pay
Borrower promises to pay Lender the principal sum of One Thousand Five Hundred Dollars ($1,500). No interest shall accrue on this Note.

2. Payment Terms
Borrower shall make ten (10) monthly payments of One Hundred Fifty Dollars ($150) each, due on the fifteenth (15th) day of each month, beginning May 15, 2025, and ending February 15, 2026.

3. Prepayment
Borrower may prepay all or any portion of the outstanding principal at any time without penalty.

Even with 0% interest, this still reads like a real legal document. It’s one of the more practical examples of promissory note examples with specific terms for family situations.

Secured promissory note example (car as collateral)

Now let’s look at a secured note, where the lender has a security interest in specific property—in this case, a vehicle.

Scenario
Lender: Private individual
Borrower: Individual
Principal: $8,000
Interest: 7% fixed
Collateral: 2019 Honda Civic
Repayment: 36 monthly payments

Key secured language:

4. Security Interest
This Note is secured by a security interest in the following described motor vehicle ("Collateral"): 2019 Honda Civic, VIN 1HGBH41JXMN109186, together with all accessions and proceeds. Borrower grants Lender a security interest in the Collateral to secure payment and performance of all obligations under this Note.

5. Insurance and Risk of Loss
Borrower shall maintain comprehensive and collision insurance on the Collateral naming Lender as loss payee. Risk of loss or damage to the Collateral shall remain with Borrower.

6. Default and Remedies
Upon default, Lender may exercise all rights and remedies of a secured party under applicable law, including repossession and sale of the Collateral.

This kind of language borrows heavily from Article 9 of the Uniform Commercial Code (UCC), which most U.S. states follow in some form. You can review the UCC structure via the Legal Information Institute at Cornell Law School for more background.

Business promissory note with balloon payment (short-term financing)

Business notes often mix smaller monthly payments with a large balloon at the end. This is one of the more common examples of promissory note examples with specific terms used in small business deals.

Scenario
Lender: Private investor
Borrower: LLC
Principal: $150,000
Interest: 9% fixed
Payments: Interest-only for 11 months, balloon in month 12
Jurisdiction: New York

Sample structure:

2. Interest-Only Payments and Balloon
Borrower shall make eleven (11) monthly interest-only payments, each in the amount of One Thousand One Hundred Twenty-Five Dollars ($1,125), due on the first (1st) day of each month, beginning April 1, 2025. On March 1, 2026 (the “Maturity Date"), Borrower shall pay in full all outstanding principal, together with all accrued and unpaid interest.

3. Business Purpose
Borrower represents that the proceeds of this Note will be used solely for business purposes and not for personal, family, or household use.

The explicit “business purpose” clause is important. It can affect which consumer protection laws apply. For an overview of federal consumer credit rules, the Consumer Financial Protection Bureau maintains up-to-date guidance at consumerfinance.gov.

Variable interest rate promissory note example (indexed to prime)

Sometimes parties want the interest to move with market rates. Here’s an example of a note tied to the Wall Street Journal Prime Rate.

Scenario
Principal: $50,000
Interest: Prime + 2%
Repayment: 60 monthly payments
Adjustment: Quarterly

Key variable-rate language:

2. Interest Rate
The unpaid principal balance shall bear interest at a variable rate per annum equal to the Prime Rate as published in The Wall Street Journal plus two percent (Prime + 2.00%). The interest rate shall adjust on the first day of January, April, July, and October of each year (each, a “Change Date").

3. Interest Rate Limitations
Notwithstanding the foregoing, in no event shall the interest rate exceed the maximum rate permitted by applicable law.

This is where state usury laws matter. Each state sets its own maximum interest rates, with different rules for consumer vs. commercial loans. A good starting point is the Legal Information Institute’s state law resources, which link to state statutes.

Installment promissory note for equipment purchase (business asset financing)

Here is one of the best examples of promissory note examples with specific terms for a small business buying equipment from another business.

Scenario
Lender/Seller: Equipment company
Borrower/Buyer: Small manufacturer
Principal: $40,000
Interest: 6.5% fixed
Collateral: The equipment being sold
Repayment: 48 equal monthly installments

Representative terms:

1. Purpose and Sale
This Note evidences part of the purchase price for the following equipment ("Equipment"): One (1) CNC milling machine, Model X-5000, Serial No. 12345.

2. Repayment
Borrower shall pay the principal sum of Forty Thousand Dollars (\(40,000), together with interest at the rate of six and one-half percent (6.50%) per annum, in forty-eight (48) equal monthly installments of Nine Hundred Forty-Five Dollars and Twenty-Four Cents (\)945.24), due on the 10th day of each month, beginning June 10, 2025.

3. Security Interest
Borrower grants Lender a purchase-money security interest in the Equipment to secure payment of this Note.

Again, this is built around UCC Article 9 concepts. For more technical background on secured transactions, many law schools publish open-access materials; for instance, you can find UCC discussions through Harvard Law School’s library resources (a helpful reference point even if you’re not a lawyer).

Student or training loan promissory note with deferred payments

Training programs and private education providers often use promissory notes with delayed repayment. Here’s an example of how deferred payments might be drafted.

Scenario
Principal: $12,000
Interest: 4.5% fixed
Grace period: 6 months after course completion
Repayment: 60 monthly payments after grace period

Sample language:

2. Deferment Period
No payments shall be due and payable under this Note until the earlier of (a) six (6) months after Borrower completes the Program, or (b) December 31, 2026 (the “Repayment Start Date"). Interest shall accrue during the deferment period.

3. Repayment Terms
Beginning on the Repayment Start Date, Borrower shall make sixty (60) equal monthly payments of Two Hundred Twenty-Two Dollars and Twenty-One Cents ($222.21) until all principal and accrued interest are paid in full.

If you are dealing with federally backed student loans, very different rules apply. The U.S. Department of Education provides official guidance and forms at studentaid.gov, which is the authoritative place to check for 2024–2025 policy changes.

Short-term bridge loan note (high interest, strict default terms)

Private bridge loans—often used in real estate—tend to have higher rates and very tight default language. Here’s one of the more aggressive examples of promissory note examples with specific terms you might see.

Scenario
Principal: $75,000
Interest: 12% fixed
Term: 9 months
Collateral: Second mortgage on property
Jurisdiction: Florida

Key default and acceleration language:

4. Maturity Date
The entire unpaid principal balance, together with all accrued and unpaid interest, shall be due and payable in full on January 31, 2026 (the “Maturity Date").

5. Events of Default
The following constitute Events of Default: (a) failure to pay any amount due under this Note within five (5) days after its due date; (b) Borrower’s bankruptcy or insolvency; (c) sale or transfer of the property securing this Note without Lender’s prior written consent.

6. Acceleration
Upon an Event of Default, Lender may, at its option and without notice, declare the entire unpaid principal balance, together with all accrued interest and other amounts due, immediately due and payable.

When you’re working with higher interest rates like this, you need to be very careful about state usury limits and licensing requirements for lenders. Check your state’s attorney general or financial regulator website; many states publish plain-language summaries of lending rules on their .gov domains.

Trends in promissory notes for 2024–2025

A few patterns are showing up consistently in 2024–2025:

• More digital execution: Electronic signatures are now standard in many transactions. In the U.S., the ESIGN Act and state-level UETA laws generally recognize properly authenticated e-signatures as valid. You can read the federal ESIGN statute through the U.S. Government Publishing Office.
• Clearer consumer disclosures: Even for private notes, lenders are increasingly mirroring consumer-style disclosures (APR, total of payments, late fees) to avoid disputes.
• Variable-rate caution: After recent interest rate volatility, parties are drafting more specific caps and floors for adjustable-rate notes.
• More detailed default and workout provisions: Instead of a single harsh acceleration clause, notes often outline cure periods, notice requirements, and options to modify payment schedules.

You can see these shifts reflected in sample forms and guidance from legal aid organizations and bar associations, which are reacting to recent litigation and regulatory changes.

Key clauses to study in these examples of promissory note examples with specific terms

Looking across all of these real examples, a few clauses repeat over and over, regardless of loan size:

• Promise to pay: Identifies borrower, lender, principal, and interest.
• Payment schedule: Exact dates, number of payments, and amounts.
• Interest structure: Fixed vs. variable, how it’s calculated (simple interest vs. compounding), and any caps.
• Late fees and grace periods: When a payment is considered late and how much the fee is.
• Prepayment: Whether there is a penalty or not.
• Security interest / collateral (if any): Detailed description and reference to applicable law.
• Default and acceleration: What counts as default and what the lender can do.
• Governing law and jurisdiction: Which state’s law applies and where disputes must be resolved.

When you review the best examples of promissory note examples with specific terms, pay attention not just to what is included, but also to what is left out. Vague phrases like “to be paid back soon” or “interest as agreed by the parties” are invitations for litigation.

FAQ about promissory note examples with specific terms

Q: Can you give an example of a very basic promissory note for a small personal loan?
Yes. A bare-bones note might say the borrower promises to pay $500 to the lender on a specific date, with or without interest, and include a single late fee clause. Even then, you still want names, addresses, a clear due date, and signatures.

Q: Do all examples of promissory note examples with specific terms need a lawyer to be valid?
Not necessarily. Many small personal and family notes are drafted without a lawyer. That said, if the loan is large, secured by real estate, or used for business, it’s smart to have an attorney review it—especially to avoid violating state lending laws.

Q: What are common mistakes people make when copying examples of promissory notes from the internet?
The biggest mistakes are copying terms that don’t match local law, using interest rates that exceed state limits, forgetting to update dates and names, and failing to properly attach or describe collateral. Blindly copying templates can also lead to conflicts between clauses.

Q: Are handwritten promissory notes enforceable if they follow these examples?
A handwritten note can be enforceable if it clearly states the promise to pay, names the parties, specifies the amount and repayment terms, and is signed. The format matters less than the clarity and legality of the terms.

Q: Where can I find more reliable examples of promissory note language?
Legal aid organizations, law school clinics, and some state court websites publish basic forms. For broader background on contract principles that apply to promissory notes, the Legal Information Institute is a solid starting point.

Final thoughts

If you’ve read this far, you’ve seen multiple examples of promissory note examples with specific terms across very different situations: family loans, car financing, business deals, training programs, and short-term bridge loans. The pattern is consistent: the more specific the terms, the fewer surprises later.

Use these real-world style examples as a drafting checklist, not as plug-and-play legal advice. Then, when the dollar amounts or risks get serious, have a qualified attorney in your jurisdiction review your final draft before anyone signs.