How do you amend a promissory note?

Write a short amendment that identifies the original note by date, parties, and principal, states exactly which terms change and when, says all other terms remain in effect, and is signed and dated by the borrower, the lender, and any co-signer or guarantor. Attach it to the original.

Do I need a new promissory note or just an amendment?

An amendment works for a few changed terms. If many terms change, or the balance, parties, and schedule are all being reset, a new note that replaces the old one, often called an amended and restated note, is clearer. Either way, it should be in writing.

Does a guarantor have to sign an amendment to a promissory note?

It is strongly advisable. Under the UCC, a secondary obligor such as a guarantor can be discharged to the extent a modification they did not agree to would cause them a loss. Getting the guarantor's signature on the amendment avoids that question.

How to amend a promissory note

The borrower needs a lower payment, the lender agrees to push the due date, or both want to fix a term that no longer fits. Changing a signed note is simple when it's done in writing and signed by everyone on it. It gets messy when it's a handshake or one signature short.

Amendment, addendum, or new note

Amendment. Changes one or more existing terms: the rate, the payment, the due date.
Addendum. Adds something new, like a collateral description or a late-fee clause. In practice people use the two words loosely.
Amended and restated note. Replaces the whole note with a new one when many terms change. Clearer than stacking amendments.

For the bigger picture, including when changing a note restarts a statute of limitations, see refinancing or modifying a note.

What the amendment should say

Identify the original note: date signed, lender, borrower, original principal.
State the current balance as of the amendment date, so nobody argues about it later.
List each change exactly, with the effective date.
Confirm that all other terms remain in effect.
Signatures and dates from everyone who signed the original, and notarization if the original was notarized.

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Everyone on the note has to agree

A change one party makes alone isn't an amendment. Co-signers and guarantors matter most. Under the UCC, a guarantor or similar secondary obligor can be discharged to the extent a modification they didn't agree to would cause them a loss. Put their signature on the amendment. See co-signers and guarantors.

Don't rely on a verbal change

An oral agreement to change a written note is hard to prove and may not stick at all. Even an email exchange is better than nothing, but a signed amendment is the version that holds up. See why oral modifications may not stick.

Secured notes

If the note is secured by real estate, the recorded mortgage or deed of trust may need a recorded modification too, especially when the amount or maturity changes. For personal property collateral, check whether the UCC filing still covers the collateral after the change. See perfecting collateral liens.

Keep the record straight

Attach the amendment to the original note and update the payment ledger from the effective date. See keeping a payment ledger and fixing a mistake in a signed note.

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