The Alabama promissory note templates are documents that verify that a loan was given to an individual for the purpose of repayment over a period of time. The time period and interest rate are to be negotiated by the parties along with any security to be provided (if any) by the borrower.
Usury Rate – The maximum interest rate that can be charged is six-percent (6%) if the Note is longer than 1-year and 8% if greater. Minimum amount is $100 to qualify.
Laws – Chapter 8 (Interest and Usury)
Types
Secured Promissory Note – Allows the lender to hold something of value if the borrower does not pay back the amount loaned.
Unsecured Promissory Note – Usually for family, friends, or those with a high level of credit. There is no property that is guaranteed if the note becomes in default.
How to Write
Step 1 – Begin by downloading the document – Enter the following information:
- The start date of the document in dd/m/yy format
- Borrower’s name
- Mailing address
- AND
- Enter the name of the lender
- Mailing address
- AND
- Lender shall enter the principal amount of the loan
- Enter the annual percentage rate
Step 2 – Payments – Provide the date (in dd/m/yy format) in which the full balance of the loan is due (include any late fees)
Installments – Check the box indicating the mode of repayment:
- Provide the applicable amount
- should the repayment be an installment agreement, check the box stating the agreed frequency of repayment
- The lender shall enter the late fee expected to be paid by the borrower if the payment is not on time
Step 3 – Security – Submit
- The lender will check the box stating the level of security
- If this loan should be considered “secure,” enter the agreed property that will be provided in order to secure the loan
- The borrower must carefully review the remainder of this section
Step 4 – Titled Sections – The borrower must carefully read all of the titled sections as follows:
- Interest Due in the Event of Default
- Allocation of Payments
- Prepayment
- Acceleration (and 6A. – Security)
- Attorney’s Fees and Costs
- Waiver of Presentments
- Non-Waiver
- Severability
- Integration
- Conflicting Terms
- Notice
- Co-Signer – Select and check the applicable box – (If there shall be a co-signer, check the box. Enter the name of the Co-signer)
- Execution
- Governing Law – Enter the state where the note will be governed
Step 5 – Signatures – All signatories must sign in the presence of a witness – Submit the following required information:
- The Lender’s signature
- The date of lender’s signature in mm/dd/yyyy format
- Lender’s printed name
- AND
- The Borrower’s signature
- A date of signature in mm/dd/yyyy format
- Enter the borrower’s printed name
- AND
- Submit the Co-signer’s signature (if any)
- The date of signature in mm/dd/yyyy format
- The Co-signer’s printed name
- AND
- The Witness must provide their signature
- Provide a date of signature in mm/dd/yyyy format
- Witness’ printed name
