Promissory Note
(Interest Only with Balloon Payment—No Prepayment Penalty)

Summary

This template is a promissory note that provides for interest only payments through the life of the loan, culminating in a single lump sum balloon payment of principal and interest upon loan maturity. The note allows the borrower to prepay the loan, in whole or in part, at any time without premium or penalty. This template includes practical guidance, alternate clauses, and drafting notes. A promissory note evidences the obligation of one party (i.e., the maker, borrower, etc.) to another party (i.e., the payee, lender, or to bearer, etc.) to pay such other party a sum certain in money, with or without interest, either on a certain date or on demand, and according to terms and conditions mutually agreed upon by the parties. For additional guidance, see Promissory Notes and Promissory Notes Resource Kit (Small to Mid-Sized Law).