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Unsecured Promissory Note Template

Simple Alliance, Kenya Limited

Promissory Note


Basically put, a promissory note refers to a pledge to make a payment or payments.  It is a documented undertaking to settle a loan based on a number of preconditions, including:

  • At a definite time  
  • Upon demand
  • Via a sequence of payments


The promissory note has two key stakeholders namely:

  • The payee (lender)
  • The payor (maker/drafter)


Promissory notes usually delineate a number of aspects, namely:

  • The relevant parties 
  • The consideration for the responsibility – debtor’s receipts after signing the promissory note 
  • The level of obligation
  • Any applicable interest rates
  • Acceleration article that makes the entire loan amount due in case debtor defaults on payment   
  • Repayment terms

Useful Caveats

When drafting a promissory note, you need to exercise due caution. This could involve consulting your lawyer or relevant government agencies.  The consultation could enable you to become acquainted with existing laws and regulations pertaining to promissory notes. You need to abide by these rules.     

Important Terms

While dealing with promissory notes, you come across a variety of legal terminologies. Major ones include: 

  • Consideration
  • Promisee
  • Promisor
  • Obligee
  • Obligor


The obligee is the party to whom another individual is tied via a legal contract.


This refers to the individual who makes a pledge. This is the party who pledges to repay an obligation or loan that is covered by a promissory note.  


The promise is the party top whom a pledge is made. This is the individual who receives payment for the obligation or loan that is covered by  a promissory note.


This is the individual who ties themselves to another party via legal contract or agreement. 


Consideration refers to the value obtained so as to formalise an agreement. Basically, a legal contract involves mutual consideration. This consideration is the value each party to the agreement receives.  With promissory notes, the promisor normally receives a loan as a consideration.  The promisee’s consideration constitutes their plegde to repay as per the stated terms.  

Unsecured Promissory Note


The unsecured promissory note is not tied to anything. This means that the loan advanced thanks to the unsecured promissory note is advanced on the basis of the drafter’s capacity to repay.    

Key Elements

Your promissory note has the following aspects:

  • It clearly defines the repayment period
  • It clearly displays its date. The debtor becomes obligated only after this date has passed
  • Delineates the loan amount in both longhand and decimal modes  
  • Clearly states that the promissory note is unsecured  
  • Lists satisfactory repayment modes
  • Clearly reiterates borrower’s pledge to repay 
  • Gives the borrower’s and lender’s names and addresses
  • Has a signature of a commissioner for oaths


An unsecured promissory note serves several purposes, including:

  • Establishing official creditor/debtor relationships  
  • Shows that the exchanged money is a loan as opposed to a gift 
  • Helps minimise risks from issues like mismanagement, gift tax matters, and personal mistakes

 Useful Help

To introduce added efficiency, we have created an Rich Text Format (RFT) unsecured promissory note template. You can use the two-page template to create a customised promissory note for securing loans from various entities. The sample unsecured promissory note is in the below attachment. 

Key Highlights

The below unsecured promissory note template offers various benefits, including:

  • Properly identifying parties
  • Provides a repayment ledger
  • Provides optional confessional and default of judgement provisions
  • Indicates essential repayment terms
  • Delineates payment dates
  • States place of payment
  • States applicable interest

An unsecured promissory note is a payment pledge made by a promisor to a promise to settle a loan based on agreed terms and conditions. This note is not tied to any security entity.  Your effective unsecured promissory note has a number or important qualities. It unmistakably defines the repayment period. The note also clearly shows its date.  Further, the unsecured promissory note outlines the loan amount in both longhand and decimal modes. It plainly states that it is unsecured. It also lists suitable repayment modes.  The note clearly reiterates borrower’s pledge to repay. It gives the borrower’s and lender’s names and addresses. The unsecured promissory note as well has a signature of a commissioner for oaths. You can use the above unsecured promissory note template to draft your customized note.

Copyright (C) 2016, Simple Alliance Kenya Limited

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Simon Buccah  |  March 06, 2017
how do i download the template for the unsecured promisory note