A promissory note or a contract payable builds legal responsibilities between two people when the note’s issuer decides to borrow monetary funds from another party (referred to as payee). There is no officially tailored Indiana promissory note template, as in most cases, this type of agreement is a DIY contract designed for a particular situation. However, every contract should contain specific data, and we will draft a “how to fill out the form” guide later in the review.
Indiana promissory note should be indispensable when someone asks you for financial support, and the value is high enough. A free promissory note template creates a shield protecting both parties from violating the agreement’s conditions. Therefore, one should read the form attentively before appending their signature—any breach results in penalties. Thus, after the authorization, the parties should make every effort to comply with the contact’s requests.
There are two types of promissory notes available in Indiana: a secured contract and an unsecured note payable.
Secured Promissory Note
A secured promissory note implies an obligatory guarantee secured by the borrower’s property. As a rule, the issuer can offer their real estate, vehicles, personal property (jewelry or other valuable assets). If the borrower defaults or fails to refund the payee due to any reason, the lender has a legal right to compensate for the damage immediately.
Secured promissory notes usually contain information about penalties for late-payments and the collateral (a list of assets).
Unsecured Promissory Note
The unsecured promissory note contains more risks as it doesn’t imply any guarantee of immediate compensation. Should the borrower fail to reimburse the loan, the lender must file a petition in court to obtain amends. Therefore, this type of contract is common among relatives or reliable friends. Usually, unsecured promissory notes are tailored for a short period and rarely include penalties and late fee charges. However, it depends on how well the parties know each other.
Regardless of its type, an Indiana promissory note template should contain the following:
Whether to notarize the promissory agreement or not is a matter of choice. However, a notary acknowledgment is always preferable because a licensed state representative can provide a higher level of reliability and safety verifying the parties and the contract. Should you have any doubts or misconceptions, it is recommended to seek a legal professional’s assistance.
In Indiana, interest rates are regulated by § 24-4.6-1 of the Indiana Code. Under the usury laws, the interest rate equals 8% per annum, even if there has been no agreement made between the parties. Therefore, if the issue is taken to court, the afore-mentioned conditions go into effect.
Following § 24-4.5-3-201 of the Indiana Code, the lender obtains a legal right for a loan finance charge, 25% annum and lower. More details can be found in the respected Section of the Indiana Code.
Creating an Indiana promissory note template can be challenging as there are many rules to observe. Thus, we recommend our advanced software to build a respected document effortlessly. Here is the guide on filling out the form:
Enter the required calendar date and the sum in US dollars.
Submit the borrower’s and the lender’s legal names and physical addresses.
Define the percentage of interest charges (per year). Follow the document and choose the preferred alternative of repayment. The parties should select one checking the corresponding box.
Determine the maturity date as well.
Choose the appropriate variant of your promissory note type—select between a secured and an unsecured one. If creating a guaranteed promissory contract, give a list of assets that ensure the loan repayment.
Read the “Collateral” part attentively, insert the jurisdiction (here, Indiana), and append signatures. Both parties should submit their names (printed) and sign the paper.
The last section of the form contains amortization schedule attachments that should be defined and distributed to the borrower.