This Secured Promissory Note Agreement (“Agreement”) is entered into between:
(Enter name and address of person or company)
[Lender.StreetAddress] [Lender.State] [Lender.City] [Lender.PostalCode]
(Enter name and address of person or company)
[Borrower.StreetAddress] [Borrower.State] [Borrower.City] [Borrower.PostalCode]
If the Lender or Borrower is a company, record the registered name of the company and add words, “formed in [insert country of incorporation], with registration number [insert number] and a registered business located at [insert business address].”
Whereas in terms of the Agreement, the Lender hereby promises to pay an amount not exceeding (enter the maximum amount of money owed) (“Capital Amount”) together with the interest that may become payable on the Capital Amount from time to time (“Interest”), in accordance with the Agreement and at the rate(s) specified herein.
Therefore in terms of all agreements, acknowledgments, and covenants under the Agreement, the Lender and Borrower agree as follows:
3.1 The Capital Amount will mature on (insert date of maturity).
3.2 From the date of (insert first date of interest), simple Interest shall begin accruing on the Capital Amount at a rate of (insert Interest rate) (“Rate”) and continue accruing on the (insert day – example “30th”) day of each succeeding month on the balance of the Capital Amount still owed until such time that the Capital Amount is repaid in full.
3.3 The Borrower agrees to repay the Capital amount and Interest in monthly installments of (insert amount) on or before the (insert day) day of each month, commencing from (insert date of first installment) until such time that the Capital Amount and Interest are repaid in full.
A secured promissory note may also cater to the repayment of the loan in one lump sum. To properly complete the payment terms of the template, ensure that the relevant amounts, rates, and dates are recorded accurately in numbers.
If the Borrower fails to make any payment in terms of this agreement when such payment falls due, the Lender retains the right to declare all payments under the Agreement immediately due and payable.
The Borrower retains the right to make full repayment of the Capital Amount and any Interest owed at any time before such amounts fall due with no penalties being levied.
6.1 The Borrower’s promise to pay will be secured by a Security Agreement against the Borrower’s property described as (insert details of property) (“the Property”).
6.2 In the event of Acceleration being applied, the Property shall be transferred to the Lender, who shall thereafter retain full rights to ownership and possession of the Property.
6.3 Term 6.2 above notwithstanding, the Lender shall not be allowed to transfer, sell or otherwise alienate the Property without the Borrower’s written consent until such time that the Borrower is provided with a maximum of seven (7) days to cure any defaults.
6.4 Should the Borrower not cure a repayment obligation in time, the Lender reserves the right to sell, transfer, or alienate the Property as full repayment for any amounts still owed.
6.5 Should the value of the Property be insufficient to satisfy the full amount of the Capital Amount and any Interest still owed to the Lender, the Borrower will remain liable for the balance, which shall continue to accrue interest on a monthly basis at the maximum rate permitted by any applicable law.
The secured property in our secured promissory note template can be either personal property or real estate property. A secured note should be accompanied by a separate security agreement for the property. You can also check and customize our free security agreement template.