Promissory note template
Put a loan between two people in writing with clear repayment terms.
A promissory note template puts a personal or small-business loan in writing: who borrowed, how much, at what interest, and when it must be repaid. It is simpler than a loan agreement and is the document courts expect to see when a lender asks to be repaid.
Opens a fillable version in your browser. Free, no account, nothing uploaded.
Fields in this form
- Date
- Lender name and address
- Borrower name and address
- Loan amount
- Interest rate
- Repayment schedule
- Final due date
- Late payment terms
- Borrower signature
- Lender signature
About the promissory note
A promissory note is a written promise from a borrower to repay money to a lender. It records the amount, the repayment terms, and any interest the parties agree to.
This fillable template gives you a clear layout to complete on screen and download as a PDF that both sides can sign and keep.
When you need it
- You lend money to a friend or family member.
- A private loan needs terms both sides can point to.
- You want a record of who owes what and when it is due.
Where it stands legally
Canada: the Bills of Exchange Act defines a promissory note as an unconditional promise in writing, signed by the maker, to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to bearer. Every word of that matters: the promise must be unconditional, the amount certain, and the timing fixed or determinable. This template's fields map to that definition.
Interest: the Criminal Code makes it an offence to enter into an agreement to receive interest at a criminal rate. Since January 1, 2025, the criminal rate is an annual percentage rate over 35 per cent, calculated on the credit advanced. Fees and charges can count as interest in that calculation. Keep private loans well under that, and write the rate as an annual percentage.
Interest must be stated as an annual rate to be enforceable in Canada; the federal Interest Act limits recovery to 5 per cent per year where a rate is written in another way. State the rate per year.
Provinces set their own limitation periods for suing on a debt (often a few years from default), so a lender who waits too long can lose the right to sue. Secured loans (where the borrower pledges a car or equipment) need a separate security agreement and a registration in the provincial personal property registry to bind third parties.
United States: promissory notes are governed by state law and the Uniform Commercial Code. Usury limits vary by state, and some states require notes over a certain amount to be witnessed or notarized.
General information, not legal advice. Rules differ by province, state and city, and they change. Confirm the current rule where the document will be used.
What each field means and how to fill it
| Field | What it means | How to fill it |
|---|---|---|
| Date | When the note is made. | The date of signing, usually the date the money is advanced. |
| Lender name and address | Who is owed the money (the payee). | Full legal name and address. |
| Borrower name and address | Who promises to pay (the maker). | Full legal name and address. Two borrowers can sign as jointly liable. |
| Loan amount | The principal: the sum certain. | Dollars and cents, in figures. Say whether it was advanced in one payment or in stages. |
| Interest rate | Cost of borrowing. | Write an annual percentage (6% per year), simple or compounded, and from what date. Zero is allowed; write 0%. |
| Repayment schedule | How and when payments are made. | Instalments (amount, frequency, first payment date) or a single lump sum. Say whether early repayment is allowed without penalty. |
| Final due date | When the balance must be fully repaid. | A date. For a demand note, write payable on demand instead. |
| Late payment terms | What happens on default. | Grace period, late fee (reasonable, not a penalty), and whether the whole balance becomes due on default (acceleration). |
| Signatures | The borrower's signature makes the promise; the lender's signature confirms the terms. | Borrower must sign. Lender signature is good practice. Consider a witness for larger amounts. |
How to fill this out
- 1Enter the date and both parties with full names and addresses.
- 2Enter the principal amount and how it was advanced.
- 3State the interest as an annual rate, or 0%, and when it starts.
- 4Set the repayment schedule and the final due date, or say payable on demand.
- 5Add late payment terms and whether early repayment is allowed.
- 6Borrower signs (and lender), download the PDF, and each keeps a copy. The lender keeps the original.
Common mistakes to avoid
- A conditional promise (I will repay when I sell the house), which is not a promissory note at all.
- Interest written per month or as a flat fee, which is not an annual rate and may be unenforceable beyond 5 per cent per year in Canada.
- Interest and fees that together exceed the criminal rate.
- No due date and no demand wording, so nobody knows when default happens.
- A late fee so large it works as a penalty; courts will not enforce penalties.
- Lending against a car or equipment without a security agreement and registration.
- Forgetting the limitation period and suing too late.
What makes it hold up, and when you need a lawyer
Usually fine with this template
- Loans between family members or friends where both sides want clear terms.
- Small business loans from an owner or a private lender.
- Seller financing on a private sale of goods, paired with a bill of sale.
Use the official form or get advice
- Loans secured by real estate; those are mortgages with registration requirements.
- Large amounts, business loans with guarantees, or loans to a corporation.
- Any loan where fees, bonuses or other charges are added on top of interest.
- Cross-border loans, or loans to someone in financial distress.
Worked example (illustrative)
Made-up names and figures to show what a completed promissory note looks like. Not a real transaction.
| Promissory note, illustrative | |
|---|---|
| Date | October 1, 2026 |
| Lender | Robert Ellis, 14 Example Terrace |
| Borrower | Nadia Ellis, 77 Example Street |
| Loan amount | $10,000.00 advanced by bank transfer on October 1, 2026 |
| Interest | 4% per year, simple interest, from the date of advance |
| Repayment | 24 monthly instalments of $434.25 starting November 1, 2026; early repayment allowed without penalty |
| Final due date | October 1, 2028 |
| Late payment | 10-day grace period; if any instalment is more than 30 days late the full balance becomes due on written demand |
The instalment figure is illustrative. Use a loan calculator or an accountant to compute payments for your rate and term.
Related official forms, tools and guides
- Promissory note template guide
- Bill of sale template: when the loan finances a private sale
- Vehicle bill of sale template
- Contract template
- Demand letter: the first step when a borrower defaults
- Affidavit
Frequently asked questions
Is a promissory note legally binding?
Yes, when it is an unconditional written promise, signed by the borrower, to pay a certain sum on demand or at a fixed or determinable time. That is the definition in Canada's Bills of Exchange Act. For large or complex loans, get advice. This template is a convenience, not legal advice.
What is the difference between a promissory note and a loan agreement?
A promissory note is the borrower's promise to repay and is usually short. A loan agreement is longer, signed by both sides, and covers conditions, covenants, security and defaults in more detail.
Do I have to charge interest?
No. Write 0% if you agree on none. If you do charge interest, state it as an annual percentage rate and keep it well under the criminal rate, which is 35 per cent APR in Canada as of January 1, 2025.
Does a promissory note need a witness or notary?
Not in Canada for an ordinary note. A witness helps prove the signature for larger amounts. Some US states require notarization above certain amounts.
What if the borrower does not pay?
Send a written demand, then sue in small claims or a higher court depending on the amount, within the limitation period for your province or state. A note makes proving the debt much easier.
Can the note be secured by a car or equipment?
Yes, but you need a separate security agreement and a registration in the personal property registry to protect against other creditors. Get advice for that.
Sources checked
- Bills of Exchange Act, section 176(1) (definition of a promissory note)
- Criminal Code, section 347 (criminal interest rate) (35 per cent APR since January 1, 2025)
- Department of Justice, Bill C-69 Division 33 (criminal interest rate)
- Interest Act, section 4 (5 per cent cap when the rate is not stated per year)
Checked 2026-09-19. This page is general information and not legal, tax or financial advice.