What is a promissory note?
A promissory note is a legally binding document in which you set out the terms of the loan: how much you got, the interest rate, how long you have to repay, rate of repayment. You can get forms for promissory notes in stationery stores; some personal finance computer programs have them too. The forms are just the templateyou add the terms for your particular agreement by filling in the blanks.
Especially with family and friends, you may be able to tailor the repayment schedule to your needs. If you anticipate not showing much income in the early stages, you can put the periodic payments closer to the end of the loan, or maybe have it all come due at the end. Or you can pay the interest periodically and repay all the principal at the end. Or you can set low periodic payments at the beginning, gradually becoming larger as the term of the loan nears. It's up to you and your angels.
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>>What is a promissory note?
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