Promissory Notes & Private Loan Agreements
Lending money to a relative, a friend, or a business partner? Put the repayment terms in writing while everyone is still happy with each other.
Important: Clear Path Document Services is a non-attorney document preparation service and cannot provide legal advice. No attorney-client relationship is created. Read full disclaimer
Quick Answer
A promissory note is a written promise to repay money. It should state the amount borrowed, the interest rate if any, the repayment schedule, the final due date, what counts as default, and what happens if the borrower stops paying. Notes can be unsecured, or secured by collateral such as a vehicle or property. Michigan limits the interest rate a private lender may charge, and a note secured by real property generally has to be recorded to protect the lender's position. Clear Path prepares the note at your direction — we are not a law firm and cannot advise you on whether to make the loan. We review your terms first, then send a written quote.
Who qualifies for this service?
This document preparation service is a fit for Michigan residents who match the criteria below. If your situation is different, contact us and we'll tell you whether we can help or whether you should speak with an attorney.
- Parents and relatives lending money for a car, a house down payment, or a business
- Friends who want a real record instead of a text message
- Business owners lending to or borrowing from the company
- Sellers financing part of a sale price
- Anyone consolidating an informal debt into a clear payment plan
- Borrowers who want written proof of what they have already repaid
- Landlords converting unpaid rent into a written repayment agreement
How the process works
Clear, predictable steps from intake to court-ready paperwork.
Tell us the loan terms
Amount, rate, schedule, start date, and whether there is collateral.
We review
We check the numbers add up and the schedule is internally consistent.
Written quote
Flat preparation fee. Nothing is purchased online.
Drafting
A clear note with an amortized or flat payment schedule attached.
Signing and notarization
Both parties sign; we notarize at the same appointment when you want it.
Recording, if secured
If real property secures the note, we tell you exactly what gets recorded and where.
Paperwork we organize for you
Document preparation only. We do not represent you in court.
Documents and information you'll need
- Full legal names and addresses of lender and borrower
- Loan amount and the date funds are or were provided
- Interest rate, if any, and how it is calculated
- Payment amount and frequency, and the final payoff date
- Description of collateral if the loan is secured
- Records of any payments already made
- Photo ID for signers if we are notarizing
Common mistakes to avoid
Small errors can cost you weeks. Here's what we see most often.
- No due date, which makes the debt hard to enforce and hard to count.
- No interest term at all, which can create tax questions on larger family loans.
- Interest set above what Michigan allows on a private loan.
- No record of payments already made, so the balance becomes a fight.
- Secured by a car or property but never recorded or noted on the title.
- One page, unsigned, undated, sitting in a drawer.
- No default or acceleration clause, so a missed payment has no consequence.
Local Michigan considerations
Michigan sets statutory limits on the interest rate that may be charged on private loans, and different limits apply depending on the type of lender and transaction. That is a question to confirm with an attorney before you set a rate — we will write what you direct, and we will tell you when the number you picked should be checked. Notes secured by Michigan real estate are usually paired with a recorded mortgage or land contract and filed with the county register of deeds; a note secured by a vehicle typically requires the lien to be noted on the title. Michigan's statute of limitations on written contracts also means an unenforced note does not sit around forever.
Key Terms
- Promissory note
- A signed written promise to pay a specific amount of money on stated terms.
- Principal
- The original amount borrowed, before interest.
- Acceleration clause
- A term allowing the lender to demand the full remaining balance at once after a default.
- Secured note
- A note backed by collateral the lender can pursue if the borrower does not pay.
- Amortization
- A payment schedule that spreads principal and interest across equal payments over the loan term.
People Also Ask
Reviewed and updated by the Clear Path document team. Informational only — not legal advice.
Ready to get your paperwork started?
Start the guided intake, or call or text us — we review every matter before quoting a price, and nothing is purchased online.