Document background
A Compound Interest Promissory Note is commonly used when parties wish to establish a formal lending arrangement where interest accumulates not only on the principal but also on previously accumulated interest. This document, governed by English and Welsh law, is particularly useful for long-term loans or investment arrangements where regular payments might not be feasible or desired. The note must comply with UK financial regulations, including the Consumer Credit Act 1974 and Financial Services and Markets Act 2000, especially regarding interest rate calculations and disclosure requirements. It provides clear terms for the loan amount, compound interest rate, payment schedule, and default provisions.
