Can you have a promissory note without interest? No, the Lender can choose whether or not to charge interest. If the Lender decides to charge interest, they can pick how much interest to charge. However,
Can you have a promissory note without interest?
No, the Lender can choose whether or not to charge interest. If the Lender decides to charge interest, they can pick how much interest to charge. However, there may be tax consequences to the Lender or Borrower if interest is charged but it is not a reasonable rate.
What are the types of promissory note?
Types of Promissory Notes
- Personal Promissory Notes – This is a particular loan taken from family or friends.
- Commercial – Here, the note is made when dealing with commercial lenders such as banks.
- Real Estate – This is similar to commercial notes in terms of nonpayment consequences.
What happens when a promissory note expires?
Once the statute of limitations has ended, a creditor can no longer file a lawsuit related to the unpaid promissory note. However, he or she can still send letters and make phone calls to try to get the debt settled. The money does not stop being owed due to the statute of limitations being over.
How enforceable is a promissory note?
Promissory notes are legally binding whether the note is secured by collateral or based only on the promise of repayment. If you lend money to someone who defaults on a promissory note and does not repay, you can legally possess any property that individual promised as collateral.
What if someone defaults on a promissory note?
Promissory notes are legally binding documents. Someone who fails to repay a loan detailed in a promissory note can lose an asset that secures the loan, such as a home, or face other actions. You have a few options if someone who has borrowed money from you does not pay you back.
What happens if you can’t pay a promissory note?
What Happens When a Promissory Note Is Not Paid? Promissory notes are legally binding documents. Someone who fails to repay a loan detailed in a promissory note can lose an asset that secures the loan, such as a home, or face other actions.