Demand Promissory Note
A demand promissory note is payable in full whenever the lender requests (demands) repayment. Unlike installment or fixed-term notes, there is no set repayment schedule or maturity date. The borrower must pay the full outstanding balance upon receiving a demand from the lender, typically within a specified notice period. Demand notes are commonly used for informal loans between family members or friends, short-term business arrangements, or lines of credit. Our platform generates demand notes that comply with your state's usury laws and include appropriate notice provisions.
Frequently Asked Questions
What is a demand promissory note?
A demand promissory note is a loan agreement with no fixed repayment schedule or maturity date. The lender can call the full loan balance due at any time by providing written notice to the borrower. The borrower must repay in full within the notice period stated in the note.
How much notice must a lender give before demanding repayment?
The notice period is set in the note itself and agreed upon by both parties at the time of signing. Common notice periods range from 30 to 90 days. Your Promissory Note lets you specify the notice period that works for both lender and borrower.
When is a demand promissory note a good choice?
Demand notes work well for informal loans between family members or friends, short-term business financing, or situations where the repayment timeline is uncertain. They give the lender flexibility to call the loan while still documenting the debt in a legally binding way.
Is a demand promissory note legally enforceable?
Yes. A properly signed demand note is legally enforceable. If the borrower refuses to repay after receiving a proper written demand, the lender can pursue legal action to collect the outstanding balance.
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