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Loan Agreement ("promissory note")

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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 – 8% for written contracts, 6% for verbal agreements.

Laws –Ala. Code § 8-8-1

Types (2)

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Secured Promissory Note – Allows the lender to hold something of value if the borrower does not pay back the amount loaned.

Download: Adobe PDF, MS Word (.docx), OpenDocument

 

 

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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.

Download: Adobe PDF, MS Word (.docx), OpenDocument

 

 

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(Video) What is an Alabama Promissory Note?

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