A promissory note is a written promise to pay a debt. An unconditional promise to pay on demand or at a fixed or determined future time a particular sum of money to or to the order of a specified person or to the bearer.
New Mexico Checklist — Items to Consider for Drafting a Promissory Note: 1. Parties involved: Identify the lender (payee) and borrower (promise) accurately. 2. Loan amount: Specify the exact principal amount loaned by the lender to the borrower. 3. Interest rate: Determine the interest rate that will be charged on the loan. 4. Repayment terms: Establish the duration of the loan and the repayment schedule. 5. Late payment penalty: Decide on the consequences for any missed or late payments by the borrower. 6. Collateral: If applicable, detail any collateral provided by the borrower to secure the loan. 7. Governing law: Specify that New Mexico law will be used to interpret and enforce the promissory note. 8. Governing jurisdiction: Determine the court or jurisdiction in New Mexico where any legal disputes will be resolved. 9. Acceleration clause: Define the conditions under which the lender can demand full repayment of the loan. 10. Demand clause: State whether the lender can demand early repayment at any time. 11. Prepayment penalty: Specify if the borrower will face any penalties for repaying the loan early. 12. Usury laws: Comply with New Mexico's usury laws, which impose restrictions on maximum interest rates. 13. Default clause: Outline the consequences if either party fails to fulfill their obligations under the note. 14. Severability clause: Ensure that if any part of the promissory note is deemed unenforceable, the remaining provisions still apply. 15. Execution and signatures: Include spaces for both parties to sign and date the promissory note. 16. Notary acknowledgment: Consider having the promissory note notarized to add an extra layer of authenticity. Different types of New Mexico Checklist — Items to Consider for Drafting a Promissory Note: 1. Personal loan promissory note: Pertains to loans between individuals, such as friends or family members. 2. Business loan promissory note: Pertains to loans obtained by businesses, typically from banks or other entities. 3. Real estate promissory note: Specifically for loans related to real estate transactions. 4. Installment promissory note: Refers to loans that are repaid in regular installments instead of a lump sum. 5. Revolving promissory note: Involves a credit line with a predetermined limit wherein the borrower can borrow and repay repeatedly within the set limit. 6. Secured promissory note: Involves the use of collateral to guarantee repayment, providing security to the lender in case of default.
