Promissory notes are highly regarded in various states of the US, specifically when lending or borrowing money. Promissory notes offer both lender and borrower security that is needed to feel comfortable whenever giving a significant amount of money to any individual.
In Florida, it is essential for lenders to consider the credibility of the borrower and stipulate terms of how the loan exists between both parties. Therefore, promissory notes are used to best protect future conflicts with the borrower in case of any default on loan.
In this post, we will be discussing what Florida promissory note is and what it includes and its types. Let’s get started!
What Is a Florida Promissory Note?
In Florida, promissory note templates which are a set of legal documents are used by lender and borrower. Florida promissory note binds both parties into a legal contract which ensures that loaned money will be reimbursed to a lender on the agreed time.
Florida promissory notes give structure and security to the loan transaction. This note requires both lender and borrower to come to an agreement on various components like the amount of balance loaned, the due date to repay a loan, late fees, payment type, and so on.
Moreover, Florida promissory note template requires a witness to watch the signing of this legal document. Of note, under the Florida Statute Signing (§ 817.54), only the borrower’s signature is required on a document, specifically in the presence of a notary public.
What Important Information Is Included in Florida Promissory Note?
Florida promissory note needs the borrower to promise to repay the loan in agreement with terms and conditions. In this regard, Florida promissory note includes all essential information that is as follows:
- The date on which promissory note was created between lender and borrower
- The legal name of both lender and borrower along with their mailing address
- Principal loan amount
- Amount of interest that will be charged on money loaned
- Amount of payment
- Method of payment (monthly, weekly, or bi-weekly)
- Penalties or late fees as charged by a lender on previous due payments
- Signature of lender and borrower
In the state of Florida, there are no requirements for signing. However, only the borrower’s sign is recommended in the promissory note in the presence of witnesses.
Furthermore, Florida promissory notes include a specific usury rate. In general, Florida statutes put an upper limit of 18% interest rate per annum for loans under $500,000. At the same time, a 25% interest rate is placed on loans of more than $500,000.
Types of Florida Promissory Note
There are two main types of Florida promissory note.
Florida Secured Promissory Note
This legal document binds two entities (lender and borrower) into a legal contract ensuring that money loaned will be reimbursed to the lender. Florida secured promissory note needs both parties to come to an agreement on certain things like the amount of the principal loan, the due date to repay a loan, type of payment, late fees, etc.
More importantly, in a secured promissory note, both lender and borrower must agree on collateral items (asset or property). This collateral is used as security for borrowed money in case of any default.
When creating a secured Florida promissory note, the lender must mention the proper title for promissory notes. Otherwise, it will be difficult for a lender to claim for collateral.
Florida Unsecured Promissory Note
Another type of Florida promissory note is an unsecured promissory note. This document is used by the lender to outline the terms of the loan. Unlike secured promissory notes, the unsecured note is not backed by any collateral. The borrower does not pledge his/her asset in this note.
Moreover, this unsecured note enables the lender to ensure that he/she will receive interest revenue along with loan repayment in full. For this note to go into effect, both parties must agree with the established terms.
Florida unsecured promissory note is issued to a borrower when the lender feels that borrower has a credible financial history and the borrower will not default on the loan balance. However, this promissory does not guarantee reimbursement of a loan if the borrower fails to make a loan repayment.
In brief, Florida promissory notes are used by people who want to lend or borrow loans in Florida. You can choose any type of Florida promissory note depending on the credibility of your borrower.
If you have decided to lend money to your friend, family, or any business entity, you can avail of our great templates for Florida promissory notes. Visit our website CocoSign and download any template that suits your needs.
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