How to fill out a promissory note?by Admin | September 3, 2021
How to fill out a promissory note?
Most people who decide to use the promissory note as a method of payment do not know that it is essential to know how to fill it out. In case of filling out a promissory note incorrectly, it will not be considered valid and will not be covered by the law. For that reason, in this post we bring you all the steps that are necessary to complete a promissory note correctly without forgetting any field.
Parts to fill in a promissory note
In a promissory note there are different parts that we will have to fill in if we want to do it correctly. They are the following:
Amount to pay:
Write both in numbers and in letters the amount that remains to be paid. The amount of money written in letters must be enclosed in parentheses so that it cannot be modified. In Spain, the amount shall be expressed in euros, and cents may also be indicated.
It is important to indicate the date on which the payment will be made. If the payment will be made in different installments, set specific dates for the different payments. At that date, the payment must have been made, if it was not made we would be faced with a case of non-payment.
Name of the beneficiary:
The name of the person in favor of whom the amount will be made once the due date arrives must be indicated. These will be duly indicated in the document.
Place of payment:
The place where the amount will be paid shall be written. This can be done in two ways: write the name of the city where the payment will take place or you can be very specific and write the exact address where the payment should be made. The place of payment will always be agreed upon in a mutually agreed upon agreement between both parties.
The percentage of annual interest that the debtor will have to cover for late payment once the due date has passed is important. And even if not stipulated, they will be those stipulated by law. If it is the beneficiary who fills it in, think that by indicating it, he/she will make sure that you receive the payment on time. If the loan begins to generate interest once it has passed its maturity date, the debtor will make sure to make the payment on time so as not to have to face the payment of that interest.
It is advisable not to charge more than 15% or 20% interest. Moreover, charging more than that percentage is not allowed under your country's anti-usury laws. Set an interest rate that is at a level that both parties agree upon.
The word "promissory note":
To be considered legal, a promissory note must contain the explicit word "promissory note".
Both the obligor and the payee must sign the document. The payee must sign it to attest to his acceptance and the debtor to attest to his indebtedness. The signatures shall be made manually and the signer shall indicate his name written next to his real name.
The number allows the promissory note to be used by computer. This system makes the telematic commercial relationship much easier.
Customer Account Code and IBAN/Swift
Make sure you put the numbers correctly. It is necessary to enter both numbers.
Requirements for filling out a promissory note
It will be necessary to write the data of the debtor in the corresponding section, with the complete name of the debtor, the town, the address to which it corresponds and a telephone number where it can be located.
In case that there is a figure that guarantees the promissory note, in the back of the promissory note there is a space to indicate the data of the aforementioned and to sign its commitment as a way of sealing its commitment.
If several promissory notes must be created to settle a debt, the number of the promissory note and the total number of promissory notes must be indicated in the space provided.
Whether the promissory note is truncable or non-truncable.
The promissory note must be written in the same language.
The clause "not to order" in a promissory note indicates that these will not be endorsable to a third party, can only be transmitted by credit assignment and are not subject to stamp duty. These are different from "to order" promissory notes, which can be endorsed and are subject to stamp tax.
If in the promissory note we find the clause "to pay in account", it will mean that we will have to make the payment in a bank account.
It should be noted that there are also crossed promissory notes, two parallel lines in the middle of the front of the promissory note. In this case the promissory note can only be cashed by the legitimate holder by crediting the account. Only if he/she is a customer of the drawee, can he/she cash it over the counter. Apart from the usual crossed promissory note, there are special crossed promissory notes, where the bank is specified and the payment is obliged to be made at that bank, and general crossed promissory notes where the bank is not specified and the payment can be made at any bank.
Now that you know how to fill in a promissory note you will not have to worry about anything, since it will be protected by the legality and in case of non-payment you will be able to resort to the courts.