Wyoming Promissory Note: Important Tips for Borrowers to Note
Whenever a friend reaches out to you for financial assistance, you may be uneasy for a moment because you aren't sure they'll pay back. Worse still, your debtor may suddenly fall ill, lose their job or refuse to reimburse the loan. A promissory note can cushion you in such instances by letting you set clear terms for lending the money.
Learn vital tips for creating an effective promissory note in Wyoming.
What’s a Promissory Note?
A promissory note is an official agreement between a debtor and creditor regarding an existing loan. As the name suggests, it contains the borrower’s promise to repay the loan within the required duration. Usually, both parties agree to the terms of the agreement and confirm its validity by appending their signatures.
A promissory note is also known as:
- Note payable form.
- Promissory note form.
What Should You Include in a Promissory Note?
Unlike a conventional contract, a Wyoming promissory note doesn’t require much information. You only need to highlight essential items as follows:
The legal names of all parties, including the borrower, lender, and cosigners (if available).
If the borrower charges interest, it must highlight the annual rate and other rates for nonpayment.
How to Pay the Loan:
Will you pay interest only or interest and installments?
Does the lender charge a penalty for late payment?
Secured promissory notes contain a detailed description of the collateral, including its value, condition and location.
Frequency of Payment:
Will you pay in installments, lump-sum or installments with a balloon payment?
The document must have the borrower’s and cosigner’s signatures to remain valid.
When Do You Need a Promissory Note?
A promissory note is a prerequisite when you need to establish a clear lending relationship with the lender.
It would help if you had a promissory note under the following circumstances:
- Lending or borrowing money from a friend or family member.
- You’re applying for a loan from a bank or credit union.
- You want to buy a valuable item without sufficient cash.
- You’re giving out a loan and want to charge interest.
How Can You Write a Wyoming Promissory Note?
You can draft a handwritten promissory note and customize it to suit your unique requirements. Unlike what people think, a handwritten note is valid and enforceable in court, provided it contains the signatures of both parties.
However, the best option is to download an online template for a Wyoming promissory note. You can document your terms even without an attorney's assistance.
The process involves the following key steps:
Download and Filling Out the Form
Download an editable template appropriate for the state of Wyoming. Afterward, you can fill out the relevant information as you wish.
Review the Document
Please review the document to ensure it contains accurate and lawful terms. At this point, you may involve the other party, so you reach a mutual agreement on all the terms contained in the document.
Formalize Your Agreement
Make your document valid by appending your signature and that of your cosigners. The best thing about online promissory templates is the ability to sign them electronically.
How Much Interest Should You Charge?
Many people are uncomfortable charging interest for loans, especially when dealing with friends and relatives. However, the law allows you to agree on a mutual interest rate with the lender.
Under Section 40-14-106 of the Wyoming Statutes, the maximum interest rate remains 7% per year if you don’t have a written agreement.
A promissory note is a must-have for any borrowing or lending agreement. Fortunately, you don’t need an attorney when writing the agreement. A ready-made template makes your work easy by saving on cost and time. You may download a printable promissory note in Wyoming here at this website.