Promissory Note For Lending Money Template for India

The Promissory Note For Lending Money is a crucial financial document used extensively in Indian lending transactions, governed primarily by the Negotiable Instruments Act, 1881, and the Indian Contract Act, 1872. This document is essential when formalizing loan agreements between parties, whether in business-to-business transactions, personal loans, or institutional lending. It serves as evidence of debt and includes specific details about the loan amount, interest rate, repayment schedule, and the unconditional promise to pay. The document's importance lies in its enforceability in Indian courts and its role in protecting both lender and borrower interests. It's particularly valuable in situations requiring clear documentation of financial obligations and can be used alongside other security documents for larger transactions.

1. Date and Place: Clearly stated date and location of execution of the promissory note, which is crucial for enforcement and limitation period calculations

2. Parties' Details: Full names, addresses, and identification details of the maker (borrower) and the payee (lender)

3. Unconditional Promise: Clear and unconditional promise to pay a certain sum of money, as required by Section 4 of the Negotiable Instruments Act

4. Amount and Currency: The principal amount in both figures and words, along with the currency denomination

5. Interest Rate: Specified rate of interest, calculation method, and payment frequency

6. Repayment Terms: Due date or installment schedule, method of payment, and place of payment

7. Default Provisions: Consequences of default and acceleration clause

8. Signature: Signature of the maker (borrower) with date and place