Free New Hampshire Promissory Note

Essential Things to Know About New Hampshire Promissory Note

If you want to lend or borrow money in New Hampshire, you will probably come across the term promissory note. As the name suggests, a promissory note is like a promise by the borrower to repay debt while meeting the provided terms on how to make the repayment.

An established financial institution can issue a promissory note and so can an individual or entity that wants to lend money to another individual or business. But keep in mind that a promissory note is different from a contract. Unlike a contract, a promissory note doesn't outline the conditions or what happens if the borrower defaults on the loan.

What's the Main Component of a Promissory Note?

A promissory note outlines the terms of the loan agreement and the identities of the lender and borrower. It identifies the amount being borrowed and the expected frequency of payments.

The document should also cite the interest rate if applicable. And suppose the borrower and lender agree to secure the note. In that case, they should indicate the collateral in the promissory note without forgetting the issuing date and the signatures of both parties.

How Does a New Hampshire Promissory Note Work?

There are two main types of promissory notes in New Hampshire as follows:


Unsecured promissory notes are primarily used in personal loans or low amount loans based on the borrower's ability to pay. For instance, if you lend money to your family or friend, you trust them personally and don't have a reason to doubt their willingness to repay. But it would help if you still had a promissory note for tax purposes.

Secured Promissory Note

This document is primarily used in high-value loans by individuals and banks. You can still use a secured promissory note when giving a personal loan to your loved ones if the amount is huge or they intend to use the money for businesses. Securing a promissory note means that you will need collateral, which can be real estate property or a car, to cover the loan. You only return these properties to the owners once they are done with loan repayment.

Common examples of secured debts are auto loans and mortgages. The former is secured by your car, while your home or deed of trust secures a mortgage. A promissory note shows that the borrower promised they would fulfill their end of the deal. So if they don't, the lender has the right to move to court to be granted the power to foreclose or repossess the collateral to cover the loan amount.

With unsecured loans, including credit and debit cards, the lender has nothing to repossess if the borrower doesn't pay on time. Still, lenders can move to court and according to the law, the judge will check if the borrower has any possession whose value matches that of the loan. If not, the lender can only do too little.

Types of New Hampshire Promissory Notes

Secured and unsecured promissory notes are further classified into:

Informal Notes:

also known as personal promissory notes, these documents are used in personal loans among friends and relatives.

Real Estate:

This note is used in mortgage and other real estate purchase arrangements.


Commercial promissory notes are used in business findings. They are formal and specific to details.

Investment Promissory Note:

Entities can use investment notes to raise capital. These notes can also be sold to other investors when a business wants to reduce risk.

Drafting a promissory note can be daunting, especially for a first-timer. But it doesn't have to be with our free downloadable templates. Check out our ready-to-use New Hampshire promissory note sample on our website.