How to Write an Iowa Promissory Note?
Are you a resident of Iowa? A promissory note contract is one of the essential documents you should have when borrowing a loan.
The debtor promissory loan is proof of the existing financial transaction and protects your rights as a borrower. Moreover, a promissory note lets you set out your payment conditions, including a flexible refund period.
Read on for more about Iowa promissory note and how to write one.
What Is an Iowa Promissory Note?
A promissory note in Iowa is a tailored document explaining that a borrower received a loan from the lender and will reimburse as agreed.
In the document, parties can agree on critical aspects such as repayment period, installment amounts, interest rates and the principal amount.
An Iowa promissory note is a legal instrument enforceable under the law. As a result, when both parties sign the contract, they must follow the payment schedule until maturity.
In Iowa, promissory note are of two types: secured and unsecured.
When you sign a borrower promissory note, you’ll include tangible assets to replace the loan if you can’t pay. If you default on payment terms, the lending institutions will legally possess the property.
On the other hand, an unsecured loan doesn’t require you to include a valuable item. Instead, if you can’t pay the loan, the lender will only seek legal redress in court. Some lenders may also share your details with a credit bureau, severely affecting your credit score.
How Do Lenders Charge Interest in Iowa?
The Iowa Code 535 regulates the interest rates for unsecured and secured contracts.
Lenders may charge a maximum of 5% annual interest rates unless otherwise agreed by both parties. The law further permits the Iowa Superintendent of banking to revise the yearly tax rates.
How Do You Write an Iowa Promissory Note?
Writing an Iowa note is easy, thanks to customized templates available online. But still, if you need legal assistance, consult a qualified commercial attorney.
The first step is to download the correct template applicable in your state. Afterward, you can specify if the agreement is a secured or unsecured note in the title section. Without proper labeling of the title, the court may regard a secured note as unsecured.
Once you label your promissory note, you can enter the relevant information to explain the purpose of the contract.
Below are essential steps to write an Iowa promissory note:
Write the Date
A valid promissory note should have the date for future reference and retrieval. Below the title, you should write the current date, following the prescribed format. The date section also includes the principal amount you received in US Dollars.
Name of the Parties
The parties of a transaction are critical pillars in an Iowa promissory note. You should include the lender and borrower's legal name and complete address.
Indicate the Interest Rate
The contract should include a specific interest that both parties endorse. However, the interest rate should conform to the state requirements.
Write a Payment Schedule
Register payment schedule, specifying whether to pay in installments or lump sum. Iowa promissory note allow borrowers to pay in monthly installments. Indicate the number of installments and when installments will be due. The payment schedule also includes additional charges for late payments.
Indicate the Maturity Date
A promissory note outlines the last day of making the loan payment beforehand.
Sign the Contract
An Iowa promissory note requires the signatures of the lender, borrower and cosigner if available. However, the laws in Iowa do not require you to notarize or have witnesses for the promissory note.
Getting a promissory note from an attorney is usually a long and tedious process, especially if you do it for the first time. So, save your time and money with our free promissory note available for download today.