What is a Payment Agreement?
Agreements can fall apart, so when your money is involved you should take care to ensure you're protected. Whether you're the borrower or the lender, having everything clearly documented in writing can give you the extra assurance you need. Getting a Payment Agreement drafted is a great foundation for a smooth loan.
When to use a Payment Agreement:
- You plan to borrow money.
- You're thinking about lending money.
- Wish to prepare an amortization table.
- You want to figure out and document monthly payments and interest.
For value received, the undersigned (the "Borrower"), at , , , promises and (collectively, the "Borrower"), at , , , each as principal, jointly and severally, promise to pay to the order of (the "Lender"), and (collectively, the "Lender"), (or at such other place as the Lender may designate in writing), the sum of with
. TERMS OF REPAYMENT
THE BORROWER UNDERSTANDS THAT THE PAYMENT OF THE ABOVE INSTALLMENT PAYMENTS MAY NOT FULLY AMORTIZE THE PRINCIPAL BALANCE OF THE NOTE, AND THEREFORE, A BALLOON PAYMENT MAY BE DUE ON THE DUE DATE.
. Application of Payments
All payments on this Note shall be applied first in payment of accrued interest and any remainder in payment of principal.This Note is secured by personal property in a . This Note shall be secured by a to real property commonly known as , , . Any such prepayment shall be applied against the installments of principal due under this note in the inverse order of their maturity and shall be accompanied by payment of accrued interest on the amount prepaid to the date of prepayment.
. COLLECTION COSTS
If any payment obligation under this Note is not paid when due, the Borrower promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process.
If any of the following events of default occur, this Note and any other obligations of the Borrower to the Lender, shall become due immediately, without demand or notice:
1) the failure of the Borrower to pay the principal and any accrued interest when due;
2) the liquidation, dissolution, incompetency or death of the Borrower;
3) the filing of bankruptcy proceedings involving the Borrower as a debtor;
4) the application for the appointment of a receiver for the Borrower;
5) the making of a general assignment for the benefit of the Borrower's creditors;
6) the insolvency of the Borrower;
7) a misrepresentation by the Borrower to the Lender for the purpose of obtaining or extending credit; or
8) the sale of a material portion of the business or assets of the Borrower.
assets pledged as security real estate pledged as collateral
. SEVERABILITY OF PROVISIONS
If any one or more of the provisions of this Note are determined to be unenforceable, in whole or in part, for any reason, the remaining provisions shall remain fully operative.
All payments of principal and interest on this Note shall be paid in the legal currency of the United States. The Borrower waives presentment for payment, protest, and notice of protest and demand of this Note.
No delay in enforcing any right of the Lender under this Note, or assignment by Lender of this Note, or failure to accelerate the debt evidenced hereby by reason of default in the payment of a monthly installment or the acceptance of a past-due installment shall be construed as a waiver of the right of Lender to thereafter insist upon strict compliance with the terms of this Note without notice being given to Borrower. All rights of the Lender under this Note are cumulative and may be exercised concurrently or consecutively at the Lender's option.
This note may not be amended without the written approval of the holder.
. GOVERNING LAW
This Note shall be construed in accordance with the laws of the
This Note shall be signed by and and by . , on behalf of
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Agreement has been executed and delivered in the manner prescribed by law as of the date first written above.
Signed this _____ day of _______________, _____, at ___________________________, _________________________ .
The is secured by collateral pledged by . Therefore, a Security Agreement should be signed by the parties in addition to the .
and fail fails or and and
Payment Agreement FAQs
How do I write a Payment Agreement?
You can create your own Payment Agreement online with Rocket Lawyer. Just answer some questions and a document will be built just for you. Put together your answers to the following questions to make the process speedier:
- Will the borrower have to pay interest on the loan?
- How will the Payment Agreement be paid?
- Will the Borrower receive a discount if the Payment Agreement is paid off early?
- Will this Payment Agreement be secured with collateral (personal property or real estate)?
If you don't have all of the details you need, you can skip questions, save your document, and come back later to complete it.
How do I make a Payment Agreement?
Making a Payment Agreement is a fairly straightforward process. You can complete the Payment Agreement document here, through Rocket Lawyer, and outline the terms of the loan within a few minutes. You'll need to finalize your document by having both parties (i.e. seller and buyer) sign the document.
How do you write a legal document for money owed?
A Payment Agreement is a legal document that outlines the important terms and conditions of a loan. You may use a Payment Agreement to document money that is owed to you or money that you owe to someone else. It specifies the amount of the loan, the interest rate, the repayment terms and includes other specific provisions. With Rocket Lawyer, you can make a Payment Agreement for free.