Alabama Unsecured Promissory Note Template

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The Alabama unsecured promissory note permits two (2) parties to come together for an agreement that allows a lender to issue borrowed money to the other party with the appeal of getting more money in return through interest. The only negative about an unsecured promissory note is that the lender is not guaranteed anything if the borrower defaults on their payment other than reporting the debt to a credit agency.

How to Write

Step 1 – In the header of the document, before the sections, the agreement will need to list the following key aspects:

  • Date of Agreement;
  • Both Parties – Names and Addresses of the Borrower and Lender;
  • Loan Amount;
  • and the Interest Rate which must be in accordance with the State law (Title 8, Chapter 8)

Step 2 – There are three (3) ways for a lender to be paid back, a lump sum at the end of the term (principal + interest), specified payment periods, or interest-only payments until the end in which the remaining principal is then paid.

Payments are usually made on a per month or per week period or if the writer downloads the form in either .odt or .docx they can edit the form and establish any type of payment structure.

Step 3 – In sections 2 & 3 the parties will be able to fill in the dates when the note is due and the percent interest rate due in the event there is a default (payment of 15 days late).

Step 4 – Sections 6 & 7 detail the late fees in the chance the borrower does not pay on-time and the number of days the borrower has if acceleration is issued.

Step 5 – In the signature area both parties should sign and keep a copy for their records. It is recommended to have at least one (1) witness to the transaction that is a third (3rd) party with no relation to either.