A promissory note is legally binding and valid when it contains the information a promissory note must contain and when it is signed by both the lender and the borrower. You can benefit from having a witness sign the document. For example, it could be a family member, a mutual friend, a colleague, or a lawyer. This ensures that it is not only the lender and the borrower who have signed the debt, which only makes the validity stronger.
Get a Free Debt Letter Template
Instead of spending money on buying a debt collection template online, or paying expensive judgments for an accountant or a lawyer to make one, you can download our free debt collection template. The template contains all the information that a debt note should have. Download the template below and fill in the blank fields.
Who can make a debt note?
One is tempted to believe that a debt note should be made by a legal person such as a lawyer or accountant. It is not necessary. There is no requirement that there is an attorney or similar authority in place when a debt note is to be made. However, in the case of a larger loan amount, this can be an advantage, as larger loans often have to make more and more elaborate points on the debt note that the borrower must fulfill.
Benefits of a Debt Letter
There are many ways in which debt can be raised. You can borrow money from the public, private, and your bank or other lending institutions. There are both advantages and disadvantages of borrowing money privately from either family, friends or a boyfriend.
The advantage is that you avoid set-up fees and, as a rule, do not have to pay interest on your loan. Together, you can agree on how the debt should be settled, and it is therefore a lot more flexible than if you borrow the money in the bank. Even if you are a family, close friends or girlfriend with a lender or a borrower, it is important that a letter of debt is made between the parties involved. This ensures that the lender gets his money back.
Disadvantages of borrowing from friends or family
Borrowing money is always a sensitive issue, so asking family or friends for help can be difficult. A potential disadvantage of borrowing from family and friends is that with the loan there may be questions as to what the money should be used for. It’s not always a question you want to answer and for some it can be a very private matter. That’s why Mandy doesn’t question what to spend your money on.
Should disputes arise between the borrower and the lender in connection with the loan, it may at worst affect the relationship between the two parties. It is often heard that friends or family members have discussions about money. Therefore, you should think carefully before borrowing money from your loved ones.
Whether you want to lend 10,000, 75,000 or 1,000,000 to a friend, colleague or family member does not matter. You can borrow as much as you want with a debt note. Of course, this applies if you lend the money yourself or if you want to borrow money from others. The only thing that is important in this regard is that you make sure that you complete the debt note correctly and with the information that a debt note must contain. If you note in the debt note when the money is to be repaid, it is important that you are realistic. There is no need to write a payment deadline that the borrower is unable to meet.
Want to get away from borrowing from family or friends?
Are you in a situation where you are missing money on the account but would like to avoid borrowing from your relatives? Then there is help to download. It’s not always nice to ask your friends or family for money. You usually take care of your private finances, and you can keep doing that.
At Mandy you can borrow between 3,000 and 20,000 kroner for whatever you need. Maybe you’re missing out on unforeseen expenses, paying a bigger bill, or maybe you’re missing a new bike? There can be many reasons why a loan is appealing to you. It only takes 1 minute to fill out our application form. Then we do a quick credit assessment of you. Within 2 minutes you will receive a reply to your application. If we approve your application, you have the money in your account within minutes.