Free Promissory Note Generator for Family Loans

Put a loan to a family member or friend in writing as a promissory note: the borrower's signed promise to pay. Enter the terms and the installments and due dates are calculated for you.

What is a promissory note?

A promissory note is a written promise, signed by the borrower, to pay the lender a set amount on set terms: the amount, any interest, when payments are due and what happens if they stop. The borrower signs it and the lender keeps it. A loan agreement records the same loan as a contract that both of you sign.

Create Promissory Note

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Enter 0 for no interest.

The rate follows a published reference rate, such as the prime rate, and changes on set dates.

This is when your first loan payment will be due. Past dates are allowed for running loans.

Turn this on if the money went out well before repayment starts, for example lent in January with the first payment in July. Interest over that gap is added to the loan.

A promissory note covers one loan amount. For a line of credit with draws, choose the loan agreement.

Important Legal Disclaimer

This tool generates loan agreement templates for informational purposes only. They are not a substitute for the advice of an attorney. Family Loan Tracker is not a law firm, financial institution, tax advisor or licensed financial advisor, and we do not provide legal, tax or financial advice. For large amounts, secured loans or complex situations, have a qualified attorney review the agreement.

For more information about our editorial practices and limitations, please read our Editorial Policy.

Promissory note or loan agreement?

Both record the same loan, and this generator writes both from the same terms. A promissory note is the shorter document: the borrower promises to pay and signs, and the lender holds the note. A loan agreement is a contract the lender and the borrower both sign, so it can also set out what the lender commits to, such as paying out further draws on a line of credit.

You can switch between the two at the top of the form without losing what you entered. For a large or secured loan, have a lawyer review whichever document you use before it is signed.

Open the loan agreement generator

What the note contains

  • The amount, the date it is paid out, and the names and addresses of the borrower and the lender
  • The interest rate and how interest is calculated, or that the loan bears no interest
  • The installment, the number of payments and the first and final due dates, from the same calculation the tracker uses
  • Prepayment, an optional late fee, and written notice before the full balance can be called in
  • Optional: security such as a house or car, a guarantor who co-signs, a witness or a notary block

Interest on a family loan

In the US, a loan between individuals that charges less than the Applicable Federal Rate (AFR) can be treated under IRS rules as partly a gift, with exceptions for smaller loans. The AFR depends on the month the loan is made and its length. A tax advisor can tell you how this applies to your loan.

AFR rates by month · AFR calculator

Rules differ by state

Whether a note should be witnessed or notarized, which interest rates are allowed, and how security on a house or car is recorded all depend on the state. The generator adds optional witness and notary blocks; it does not check the rules of your state.

After the note is signed

A note records what was promised; it does not keep track of what was paid. Track this loan for free and the schedule from the note becomes the loan in Family Loan Tracker: both of you see the balance, payments are recorded as they come in, and reminders go out before each due date.

Promissory note questions

Does the lender sign a promissory note?

No. The borrower signs it, and a guarantor if there is one. The lender keeps the signed original. If you want both of you to sign, choose the loan agreement at the top of the form.

Is a promissory note legally binding?

A promissory note is a common way to document a loan, but whether a particular note can be enforced depends on its terms and on state law. This generator produces a template, not legal advice. For a large or secured loan, have a lawyer review it before it is signed.

Does a promissory note have to be notarized?

Notarization is generally not required for a promissory note between individuals, but some people choose it and some situations call for it, for example when security on real estate has to be recorded. You can add a notary acknowledgment block; a notary may use their own state's form instead.

Can I use a promissory note for a down payment loan to my child?

The note can record that loan like any other. Mortgage lenders have their own rules for borrowed down payment money, and a loan usually counts as debt for the buyer, so ask the mortgage lender before the money moves.

What happens to the note when the loan is paid off?

The lender usually marks the note as paid and returns it to the borrower, or signs a written release. If you track the loan, Family Loan Tracker keeps the payment history as a record of the repayments.