IOU Template and Promissory Note Examples for Personal Loans
Money between friends or family can become unclear fast. These IOU and promissory note examples help you record the amount, repayment terms and signatures.
Before You Use an IOU or Promissory Note
An IOU and a promissory note both help record a debt, but they do not always do the same job. An IOU can simply acknowledge that money is owed. A promissory note usually goes further by setting repayment terms, interest, due date and what happens if payment is late.
A personal promissory note should make the loan terms impossible to misunderstand. Before signing, agree on the principal amount, repayment date, payment schedule, interest if any, late-payment terms, collateral if any, and whether both parties should keep signed copies. Docusign summarizes the core elements of a promissory note as the loan amount, interest and repayment schedule: Docusign promissory note template.
Rules for interest, signatures, witnesses, enforceability and debt collection vary by country, state or province. For larger amounts, secured loans, business lending, real estate, collateral, guarantees or any strained relationship, consider getting legal advice before relying on a simple template. If the money is being requested from a bank rather than a private person, use a bank loan request letter instead.
Simple IOU Template for Money Owed
A short IOU template for money owed when two people need a written record of the amount, repayment date and basic promise to pay.
IOU - Promise to Repay
Date: [Date]
I, [Borrower Full Name], of [Borrower Address], acknowledge that I owe [Lender Full Name], of [Lender Address], the amount of [Loan Amount in Numbers] ([Loan Amount in Words]).
This amount was borrowed on [Loan Date] for [Purpose of Loan, if useful]. I promise to repay the full amount by [Repayment Date].
Payment will be made by [Payment Method] to [Payment Details / Address].
Borrower name: [Borrower Full Name]
Borrower signature: __________________________
Date: __________________________
Lender name: [Lender Full Name]
Lender signature: __________________________
Date: __________________________
Reviewed by Sophie L., Consumer Rights Specialist
I like how this IOU stays simple. It records the amount, borrower, lender and repayment date without pretending to cover a complex loan.
Personal Promissory Note for a Loan Between Friends or Family
Use this personal promissory note when the loan needs clearer repayment terms than a basic IOU, especially with installments or interest.
Personal Promissory Note
This Promissory Note is made on [Date] between [Borrower Full Name], of [Borrower Address], referred to as the Borrower, and [Lender Full Name], of [Lender Address], referred to as the Lender.
The Borrower acknowledges receiving the sum of [Loan Amount in Numbers] ([Loan Amount in Words]) from the Lender on [Loan Date]. The Borrower promises to repay this amount according to the terms below.
Repayment terms: The Borrower will repay the loan by [Final Due Date]. Payments will be made [weekly / monthly / in one lump sum] in the amount of [Payment Amount], beginning on [First Payment Date].
Interest: [No interest will be charged / Interest will be charged at [Interest Rate]% per year, calculated on the unpaid balance].
Late payment: If a payment is more than [Number] days late, the Borrower agrees to [late fee / written notice / revised payment discussion / other agreed term], unless prohibited by applicable law.
Prepayment: The Borrower may repay the remaining balance early [without penalty / under the following conditions: [Conditions]].
Both parties confirm that they have read and understood this note. Each party should keep a signed copy for their records.
Borrower signature: __________________________
Borrower printed name: [Borrower Full Name]
Date: __________________________
Lender signature: __________________________
Lender printed name: [Lender Full Name]
Date: __________________________
Witness signature, if used: __________________________
Witness printed name: [Witness Full Name]
Reviewed by Sophie L., Consumer Rights Specialist
This version is stronger for a real loan because it covers repayment, interest and late payment terms while keeping the wording readable.
Promissory Note With Monthly Installment Payments
A more detailed promissory note with installment payments for loans repaid over time instead of one full payment on a single date.
Promissory Note With Installment Payments
Date of note: [Date]
Borrower: [Borrower Full Name], [Borrower Address]
Lender: [Lender Full Name], [Lender Address]
Principal amount: [Loan Amount in Numbers] ([Loan Amount in Words])
The Borrower promises to repay the Lender the principal amount stated above, together with any interest agreed in this note.
Payment schedule: The Borrower will make monthly payments of [Monthly Payment Amount] on the [Day] day of each month, beginning on [First Payment Date]. The final payment is due on [Final Payment Date].
Interest: [Interest Rate]% per year will be applied to the unpaid balance. If no interest is charged, write: No interest will be charged on this loan.
Payment method: Payments will be made by [bank transfer / check / cash / other method] to [Payment Details]. The Borrower should keep proof of each payment.
Missed payment: If the Borrower misses a payment, both parties agree to communicate in writing within [Number] days. Any late fee, revised schedule or default step must follow the law that applies to this note.
This note represents the repayment terms agreed by the Borrower and the Lender. Any change must be made in writing and signed by both parties.
Borrower signature: __________________________
Lender signature: __________________________
Date signed: __________________________
Reviewed by Sophie L., Consumer Rights Specialist
I would use this when the loan is paid over time. The monthly schedule and proof-of-payment line reduce the chance of confusion later.
Written Repayment Update After a Missed Personal Loan Payment
A practical personal loan repayment update when a borrower has missed a payment and needs to keep the lender informed in writing.
Dear [Lender Name],
I am writing about the personal loan recorded in our IOU / promissory note dated [Original Note Date]. The current balance is [Outstanding Amount], and the payment due on [Missed Payment Date] has not yet been made.
I want to acknowledge the missed payment clearly and avoid any misunderstanding. The reason for the delay is [Brief Reason], and I expect to make the payment of [Payment Amount] by [New Payment Date].
If this revised date creates a problem, please let me know so we can discuss the repayment schedule in writing. I understand that the original note remains in place unless we both agree to change it.
Thank you for your understanding.
Sincerely,
[Borrower Name]
Reviewed by Sophie L., Consumer Rights Specialist
This is useful because it does not hide the missed payment. It confirms the balance, gives a new date and keeps changes in writing.
Preview of the IOU and Promissory Note Template You Can Download
Below is a preview of the IOU and promissory note template you can download and edit. The document is available in Word and PDF formats for personal loans and written repayment records.
How to Write an IOU or Promissory Note Before Money Changes Hands
A borrowed-money note is weak if it only says that someone owes money. A strong IOU or promissory note should identify the parties, amount, repayment terms and signatures before the loan becomes confusing.
➡️ More practical help in our guide how to write a letter with clear terms and useful details
Name the borrower and lender
Use full legal names and addresses when possible. Nicknames or vague labels can create confusion if the note needs to be reviewed later.
See a clear identity line
This note is made between [Borrower Full Name], of [Borrower Address], and [Lender Full Name], of [Lender Address].
Write the exact amount
State the loan amount in numbers and words. Include the currency so both parties know exactly what amount must be repaid.
See amount wording
The Borrower acknowledges receiving [Loan Amount in Numbers] ([Loan Amount in Words]) from the Lender.
Set the repayment date or schedule
Say whether the loan will be repaid in one payment or in installments. Include the first payment date, final due date and payment amount if relevant.
See repayment wording
The Borrower will repay [Monthly Payment Amount] on the [Day] day of each month, with the final payment due on [Final Due Date].
Decide interest, late fees and changes carefully
Interest and late fees may be regulated. If you include them, keep the wording clear and check whether the rate or penalty is allowed where you live.
See cautious wording
Interest will be charged at [Interest Rate]% per year, unless this rate is not permitted under the law that applies to this note.
Sign and keep copies
Both parties should review the note before signing. Keep copies of the signed document and payment records so the repayment history is clear.
See signing wording
Both parties confirm that they have read and understood this note. Each party should keep a signed copy for their records.
What Makes an IOU or Promissory Note Easier to Trust
- Loan amount
- Borrower name
- Lender name
- Repayment date
- Payment schedule
- Interest rate if any
- Late payment terms
- Payment method
- Signatures
- Copies for both parties
Do & Don’t - What Keeps a Personal Loan Record Clear
A private loan can feel simple at the start and become tense later. Clear names, amounts, dates, repayment terms and signatures protect the relationship as much as the money.
What Makes the Note Too Weak
Red Flags- Use only first names or vague borrower details
- Write the amount without currency or repayment date
- Leave interest or late fees unclear
- Rely on a verbal agreement for installments
- Change the repayment plan without written confirmation
- Use a simple note for a complex secured loan
What Makes the Record Easier to Rely On
Trust Signals- Identify both parties with full names
- State the loan amount in numbers and words
- Set a clear due date or payment schedule
- Explain interest only if it applies
- Sign and date the note before money is transferred
- Keep proof of each repayment
FAQ - IOU Template and Promissory Note
What is the difference between an IOU and a promissory note? Toggle answer
An IOU usually acknowledges that one person owes money to another. A promissory note is more detailed because it normally includes repayment terms, due dates, interest if any, signatures and sometimes late-payment or collateral terms.
When should I use a promissory note instead of a simple IOU? Toggle answer
Use a promissory note when the loan has a repayment schedule, interest, a larger amount, collateral, late-payment terms or a stronger need for written proof. A simple IOU is better for a small, informal debt with basic terms.
Do both parties need to sign the note? Toggle answer
The borrower’s signature is essential because the borrower promises to repay. Having both parties sign can reduce confusion and show that the terms were reviewed and accepted. Witness or notary requirements vary by location and situation.
Should I charge interest on a personal loan? Toggle answer
Only charge interest if both parties understand the rate and if it is allowed where you live. Interest and late fees can be regulated, so avoid guessing. For larger loans, ask a qualified professional before signing.
Can I use this template for a business loan? Toggle answer
You can use the structure for a simple business-related debt, but larger or more complex business loans may need a formal loan agreement, collateral terms, guarantees, tax review or legal advice. Do not rely on a basic note for a complex transaction.
What if the borrower misses a payment? Toggle answer
Keep the response in writing. Confirm the missed payment, outstanding balance, revised date if agreed and whether the original note remains unchanged. Do not add penalties or new terms unless both parties agree and the rules allow it.
TL;DR - Put the Loan Terms in Writing
A strong IOU or promissory note should make the debt clear before memory, emotion or friendship complicates it. Name the borrower, lender, amount, repayment date, payment schedule and signatures.
For small informal debts, a simple IOU may be enough. For larger loans, interest, collateral, business funding or strained relationships, use a more detailed promissory note and check the rules that apply before signing.