100% free — customizable template

IOU Generator

Create a professional promissory note in minutes. Protect your personal loans with a clear, legally-sound agreement.

Loan Details

💡 Tips for Personal Loans

  • ✓ Set a reasonable interest rate (check your state's usury laws)
  • ✓ For loans over $10,000, consider notarization
  • ✓ Keep a signed copy for both parties
  • ✓ Be clear about consequences of late/missed payments
  • ✓ Consider using a payment tracking app for installments

Fill in the form and click "Generate IOU" to see your document preview

How to Use This IOU Generator

1

Enter Loan Details

Fill in borrower, lender, amount, interest rate, and repayment terms. Be as specific as possible.

2

Review Preview

See your IOU document generated in real-time. Make any adjustments to terms as needed.

3

Print & Sign

Download as PDF or print directly. Both parties should sign and keep a copy.

What Makes an IOU Legally Binding?

An IOU becomes a legally enforceable promissory note when it contains these essential elements:

  • Clear identification of parties: Full legal names and addresses of borrower and lender
  • Principal amount: The exact sum being borrowed
  • Repayment terms: When and how the money will be paid back
  • Interest rate (if applicable): Must comply with state usury laws
  • Signatures: Both parties must sign and date the agreement
  • Consideration: Something of value exchanged (the loan itself)

Disclaimer: This tool generates general-purpose promissory notes for informational purposes only. It does not constitute legal advice. For large loans or complex situations, consult with a qualified attorney in your jurisdiction.

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Frequently Asked Questions

Is an IOU legally binding?

Yes, an IOU or promissory note can be legally binding if it includes key elements: borrower and lender names, loan amount, repayment terms, signatures, and date. However, enforceability varies by jurisdiction and loan amount. For loans over $10,000 or complex situations, consult an attorney.

What should be included in an IOU?

A proper IOU should include: borrower name and contact info, lender name and contact info, principal loan amount, interest rate (if any), repayment schedule or due date, late fee terms (optional), signatures of both parties, and the date of agreement.

Can I charge interest on a personal loan?

Yes, you can charge interest on personal loans. However, usury laws in many states cap the maximum interest rate (typically 10-16% for personal loans). The IRS also publishes minimum applicable federal rates (AFR) for family loans to avoid gift tax implications.

Do I need a witness or notary for an IOU?

While not always legally required, having a witness or notary public witness the signing adds credibility and can help if the agreement is ever challenged in court. For loans over $10,000, notarization is strongly recommended.

What happens if the borrower doesn't pay?

If the borrower defaults, you can send a demand letter, negotiate a payment plan, or file a lawsuit in small claims court (for amounts under your state's limit, typically $5,000-$10,000) or civil court. A signed IOU strengthens your case significantly.