Demand Note Template: Promissory Note Payable on Demand

DEMAND NOTE FAQ

What is a Demand Note?

A Demand Note is a type of promissory note where the borrower agrees to repay the loan whenever the lender demands it, rather than on a fixed schedule. It offers flexibility for both parties and is commonly used in short-term or informal financing situations.

Why is a Demand Note important?

It provides the lender with maximum control over repayment, ensuring they can call the loan when necessary. It also creates a legal record of the loan terms, protecting both the borrower and lender in case of disputes.

When should you use a Demand Note?

Use a Demand Note for short-term loans, family or friend loans, business cash advances, or situations where repayment timing cannot be predetermined.

What should a Demand Note include?

Essential elements include the principal amount, interest rate (if any), repayment terms, notice requirements for repayment, default provisions, and governing law.

How does a Demand Note differ from a Term Note?

Unlike a Term Note, which has a fixed repayment schedule, a Demand Note can be called in full at any time by the lender with proper notice.

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