Delaware Promissory Note Templates

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Updated January 24, 2022

A Delaware promissory note template is a document created to bind two parties into a contract to help ensure a loaned balance is paid in a timely manner. In the agreement, both the lender and borrower agree on various details of the loan, such as the payment method, the interest rate, late fees, the time frame required for acceleration, and other pertinent information. Ensure a legal interest rate is chosen for the agreement by checking the Usury rate for Delaware found in 6 Del.C. § 2301(a).

Usury Rate – Not in excess of 5% over the Federal Reserve discount rate at the time the loan was made.

LawsDel. Code. Ann. tit. 6, § 2301

Types (2)

Secured Promissory Note – Protects the lender from financial damage by being guaranteed either a home, vehicle, or other worthy possession of the borrower in the case of a default on the balance.

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Unsecured Promissory Note – This version provides very little to no protection for the lender as there is no security in the case of a default. Because of this, the lender should ensure the borrower has a reputable credit and/or is a trustworthy individual.

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Usury Rate

Under Delaware law, except as provided below, a lender may not charge a borrowed interest at a rate more than 5% over the Federal Reserve discount rate including any surcharge. If an interest rate is not specified, the legal rate is 5% over the Federal Reserve discount rate including any surcharge. 6 Del.C. § 2301(a)

In addition, Delaware law states, “Notwithstanding any other provision in this chapter to the contrary, there shall be no limitation on the rate of interest which may be legally charged for the loan or use of money, where the amount of money loaned or used exceeds $100,000, and where repayment thereof is not secured by a mortgage against the principal residence of any borrower.” 6 Del.C. § 2301(c)
Del. Code Ann. tit. 6, § 2301 (West)

(Video) What is a Delaware Promissory Note?

How to Write

Step 1 – Download the form – Provide:

  • The start date in dd/m/yy format
  • Borrower’s name
  • Borrower’s mailing address
  • AND
  • Lender’s name
  • Mailing address
  • AND
  • Submit the principal sum of the loan
  • Enter unpaid the percentage rate per annum

Step 2 – Payments – Submit the due date of the full balance of the note to include any late fees (dd/m/yy)

Installments –

  • Check the box would indicate selected method -Submit the total note amount that will be paid by the due date
  • If the borrower will pay in installments check the “installments” box and enter the principal amount  to be paid by the due date, checking the box to establish frequency of payments
  • Provide the amount of any late fees owed

Step 3 –  Security –

  • If the note will not be unsecured, check that box
  • Should the note be “secured,” submit the information on the property that secures the note

Step 4 – Titled Sections –

  • 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 – Check the box that applies  – if there will be a co-signer submit their name
  • Execution
  • Governing Law – (Delaware)

Step 5 – Signatures – Must be signed before a witness:

  • Lender’s signature
  • Date the document in mm/dd/yyyy format
  • Printed name
  • AND
  • Borrower’s signature
  • Date of signature – mm/dd/yyyy format
  • Printed name
  • AND
  • Co-signer’s signature (if any)
  • Date of signature (mm/dd/yyyy format)
  • Printed name
  • AND
  • Witness signature
  • Date of signature (mm/dd/yyyy)
  • Printed name