A Promissory Note Line of Credit Agreement Template is a legally binding document that outlines the terms under which a lender extends a revolving line of credit to a borrower.
Unlike traditional loans, a line of credit allows the borrower to withdraw, repay, and reborrow funds up to a specified credit limit.
This agreement ensures that both parties understand their obligations, repayment terms, and interest rates.
Many websites charge a fee for such agreements and offer them in PDF format, limiting the ability to edit or customize them.
However, our free, editable Promissory Note Loan Agreement in Google Docs format allows you to easily modify the terms and details to fit your specific needs.
Why Use a Promissory Note Line of Credit Agreement Template?
- Clearly Defines the Credit Terms – This document specifies the maximum credit limit, interest rates, and repayment conditions.
- Ensures Legal Protection – Both the lender and borrower benefit from a well-structured agreement that mitigates risks.
- Customizable to Your Needs – Unlike static Promissory Formats, our editable template allows you to tailor the agreement for different loan scenarios.
- No Cost, Full Access – While other websites charge for similar templates, you can get this template for free and edit it in Google Docs with just a few clicks.
Key Sections of the Promissory Note Loan Agreement
Line of Credit Amount
The lender provides the borrower with a revolving line of credit up to a specified limit. The borrower can withdraw, repay, and reborrow funds as long as they do not exceed this amount.
Interest Rate
The borrower must pay interest on the outstanding balance at a fixed annual percentage rate. Interest begins to accrue from the date of each loan disbursement.
Repayment Terms
The borrower agrees to make monthly payments covering at least the interest accrued. The borrower can also repay the principal amount early without any penalty.
Term of the Agreement
This agreement remains valid for a set duration, after which the total outstanding amount becomes due unless an extension is granted.
Maturity Date
On the maturity date, the borrower must repay the entire principal and accrued interest.
Advances on the Line of Credit
The borrower can request advances by notifying the lender. The lender has the discretion to approve or deny requests based on the borrower’s repayment history and remaining credit limit.
Security (Optional)
If applicable, the borrower can offer collateral to secure the loan. If no collateral is required, the agreement will state that the loan is unsecured.
Default and Acceleration Clause
If the borrower fails to make payments, becomes insolvent, or declares bankruptcy, the lender can demand immediate repayment of the full outstanding balance and pursue legal action if necessary.
Late Payment Penalty
A late payment penalty is applied if the borrower fails to make payments on time. This fee is either a flat amount or a percentage of the overdue amount.
Governing Law
The agreement is governed by the laws of a specific state to ensure compliance with local legal requirements.
Amendments
Any modifications to this agreement must be mutually agreed upon in writing by both parties.
Notices
All communications regarding the agreement must be in writing and sent via certified mail or email.
Entire Agreement
This document serves as the final and complete agreement between the lender and borrower, replacing any prior verbal or written agreements.
How to Use This Free Promissory Note Template
- Click on “Get this template” – This will direct you to the Google Docs preview page.
- Select “USE TEMPLATE” – This creates a copy of the document in your Google Drive.
- Edit as Needed – Customize the details such as loan amount, interest rate, and repayment terms.
- Print or Share – Once finalized, print the agreement or share it digitally with the other party.
With this free editable Promissory Note Terms And Conditions template, you can ensure a legally sound loan agreement tailored to your needs.
No need to pay for expensive templates—click below to get yours today!