Promissory note and IOU template, Australian law
Put a loan or an unpaid debt in writing, with clear repayment terms.
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What this document does
This gives you two documents in one. A promissory note is a clean promise to pay a set sum, which can be transferable. An acknowledgement of debt records a debt that already exists and how it will be repaid, and restarts the limitation clock. Both let you set interest, repayment by a date or instalments, and add a guarantor. An Australian solicitor reviewed the template. Answer plain questions and download it ready to sign.
The questions we’ll ask
Which document
Who owes the money
Who signs for the debtor
Who is to be paid
The debt
Repayment
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Questions people ask.
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- What is the difference between a promissory note and an acknowledgement of debt?
- A promissory note is a standalone promise to pay a set sum, and it can be passed on to someone else. An acknowledgement of debt records a debt that already exists (for example unpaid invoices) and sets out how it will be repaid. Choose the acknowledgement when the money is already owed, and the note when you want a simple, transferable promise.
- Can I charge interest?
- Yes. You can set a fixed yearly rate, and an extra rate on overdue amounts. Keep the overdue rate a modest margin above the ordinary rate, because a punitive rate can be an unenforceable penalty.
- When can I still enforce the debt?
- A contract debt is generally enforceable for six years, and a deed for twelve. A demand debt's clock usually runs from the date of the document, not the demand, so take a fresh signed acknowledgement or a part-payment before six years pass.
- Can I use this for a home or personal loan I am making as a business?
- No. This is for a private or business debt only. Credit provided in the course of a lending business, mainly for personal, domestic or household purposes or to buy or renovate a home, is regulated consumer credit and needs a credit licence and disclosure this document cannot give.
- Is this a subscription?
- No. $19 once, no renewal. You own the document and can reuse the format for another debt.
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