So you want to borrow some money. Or someone wants to borrow some from you. Sometimes a handshake alone just won’t cut it. When the lender wants to put it on paper and create terms for the loan, they create a Promissory Note—often referred to as a ‘note.’ How do you define this document? A Promissory Note is a written promise by a person to pay a specific amount of money, or principle to another usually to include a specified amount of interest on the unpaid principal amount. A schedule for repayment may be specified with a variety of different terms. A promissory note may contain other terms, such as a penalty for late payments or a provision for attorney’s fees and costs if there is a legal action to collect. The promissory note is usually held by the party to whom the money is owed. There are legal limitations to the amount of interest which may be charged. When the amount due on the note, including interest and penalties (if any), is paid, the note must be cancelled and surrendered to the person(s) who signed it. At Quick Law Docs, creating a Promissory Note is easy and convenient.

Before creating your Promissory Note, be sure to have the following:

- Amount of the loan
- Specific terms of the loan, including a payment schedule
- Established interest rate

Source: http://www.quicklawdocs.com/blog/promissory-noteinterest-note/