Below are questions that you will want to consider when creating a promissory note. Print or write down this list for later reference. We’ll take a look at each of these in detail in the next section.
How much money is being borrowed?
Who is lending the money?
Who is borrowing the money?
How and when will the money be repaid?
Will there be interest charges?
What is the time period of repaying?
How often and in what form will payments be made?
Can the borrower pay off the loan early?
What will happen if the borrower can’t make payments on time or at all?
Are there penalties for late payments?
If the borrower fails to make a payment, can the lender ask for the full amount right away?
Will the loan be secured by an asset owned by the borrower?
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