Does a Promissory Note need to be notarized?


When an individual borrows funds from a lender, such as a bank, that person has to sign a formal contract before the funds are released to them. A promissory note is an agreement and provides proof that a financial agreement or contract exists between two parties. Promissory notes are particularly important if you’re lending someone, such as your friend, a large sum of money. The document is a legal record of your loan, helping protect you and ensuring you will be repaid. Promissory notes are commonly used for various transactions, such as business loans, car loans, and mortgages. It is also used for personal loans among family or friends. So, does a promissory note need to be notarized?

A promissory note isn’t required to be notarized in many US states. However, you may choose to have the document notarized by a notary public. This is because notarization can offer protection in the event of a lawsuit. Learn how to notarize a document to keep protect yourself legally. 

Sometimes, a lawsuit is your only means of lawfully enforcing a promissory note, especially if the opposing party or individual fails to repay you. A promissory note has to meet specific requirements or criteria to be considered valid. If a promissory note contains the following sections and details, it is legally valid:

  • Parties involved in the financial transaction
  • A written promise that one party will pay a specific sum of money to the other party
  • Signatures of both parties
  • Debt amount  and interest rate
  • Penalties for not paying the amount on time

Promissory notes are legally enforceable because they are similar to standard loan agreements or legal contracts and lay out certain expectations or terms for a formal agreement between two individuals. To be legally enforceable, the note must contain both an offer of agreement as well as an acceptance of agreement.

When do you need a promissory note? 

A promissory note is a written promise to pay another person, such as friend, a sum of money according to the terms and conditions stated in the loan agreement. Promissory notes are often used in real estate, auto, personal, and student loans. The document protects the lender in cases where a borrower defaults on the payment of a secured or unsecured loan.

A promissory note attorney may draft a promissory note in order to cater to any kind of loan, such as a mortgage document or real estate purchase agreement, as long as the document meets the legal precedents of a contract. Find out whether you have to notarize real estate purchase agreements. 

You also need a valid promissory note if you are the borrower. This is because it will help you understand the payment schedule and terms and keep track of your receipts. It also allows a borrower to understand the payment terms and conditions and the payoff date. Keep in mind that a promissory note can protect you from an unscrupulous borrower who demands more than the original amount.

Secured promissory note

A secured promissory note usually requires the borrower to put up assets, such as property, as collateral. And if the borrower fails to pay back the loan amount within the agreed time frame, you can seize those assets. For instance, when you buy a home, the house or property is the collateral on your mortgage. Your bank or lender can seize your home if you do not make the required payments.

Unsecured promissory note

On the other hand, unsecured promissory notes do not allow the lender or bank to secure assets for a loan. So, if the borrower defaults, you will have to file a lawsuit or go through other legal procedures to enforce the unsecured promissory note. The main disadvantage of any unsecured promissory note is that creditors who have secured interests get paid first if the borrower files bankruptcy.

You will need a valid promissory note as it is used in all types of lending situations and transactions. It could be something as straightforward as a one-time loan to your friend. On the other hand, it could be more complex, such as a car loan or a mortgage.

Does a promissory note need to be notarized?

It’s a common belief or assumption that you must have a notary public present to observe the signing of a promissory note. However, generally, a promissory note doesn’t have to be notarized in order to be valid. Promissory notes don’t have to be notarized in most cases. You can typically sign a legally binding promissory note that contains unconditional pledges to pay a certain sum of money.

However, you can strengthen the legality of a valid promissory note by having it notarized. It never hurts to add a layer of protection as you may have to use it in court. A binding promissory note can help avoid financial drama or disputes.

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Why is a notarized promissory note important? 

As with most other common law contracts, a promissory note should have all the necessary terms and conditions, such as rate of interest, which are part of the financial agreement between the two parties. When this legal document is signed by the borrower, it becomes an enforceable or legally binding contract.

However, you should know that at times, signatures from the lender and borrower aren’t sufficient to make a promissory note ironclad in a court of law. This is where notarization can help and you should get a promissory note notarized from a notary public or an online notary service.

Notarizing a promissory note also proves that the note is legitimate. When there is a disagreement or dispute, a court may question the authenticity of a promissory note signed by just one party to the contract. However, when a promissory note is notarized, it is more likely to be authentic. Find out how you can notarize an electronic signature.

Notarization is a process where a notary public or professional notary verifies that the individuals signing a formal document, such as a loan agreement or personal loans, are who they claim they are. The public notary adds a “stamp of approval” to the document. Does a notarized document expire? The notarization of your promissory note or other document doesn’t expire as long as the date on the official notarization seal at the time of attestation is valid.

When to get a promissory note notarized?

Having a promissory note notarized can help the borrower and lender avoid disagreements. It is a built-in corroboration in the court of law, and protects both the parties from unreasonable changes or lack of repayment.

When using promissory notes for personal loans or other transactions, it is prudent to explore the option of a notary public signature. If you are not sure whether it is worth it to get your promissory note notarized, keep in mind that lawyers will likely tell you that extra protection is always helpful in court.

You must, however, make sure consider your level of trust and relationship with the other party before getting a promissory note notarized.

While it is not legally required to have a witness present when you sign a promissory note, you should consider asking a relative, friend, family member, or a notary public to serve as a witness. Learn whether you can notarize for family.

Who can notarize a promissory note?

You can find notaries at real estate offices, banks, office supply stores, and many other locations. Learn more about who can notarize a document. In this digital age, you can find a public notary easily. You can also find mobile notaries and online notary services. With PandaDoc Notary, you can quickly and easily get your documents notarized without your leaving home. Find out whether you can notarize your own document

When is a promissory note legally binding?

A legally binding promissory note must include details, such as the names of the lender and borrower. Both parties must sign and date the agreement. It should also contain:

  • A written promise that one party will pay a specific sum of money to the other party
  • Debt amount  and interest rate
  • Penalties for not paying the amount on time
  • The addresses of the borrower and lender
  • Details on any security or collateral being used
  • Payments terms and conditions, including how often and the amount
  • What happens if there’s a default

When all the loan terms and conditions are addressed and it’s signed by both parties to the contract, the promissory note becomes a legally binding contract.  In many US states, such as Colorado, the law does not require you to formally record a promissory note with a governmental agency. If the note is properly filled out and signed by both the lender and borrower, it is deemed legally enforceable.

However, many businesses and individuals may nevertheless choose to have their promissory notes notarized to avoid potential disputes and legal complications over authenticity even if the governing law or regulation does not require it.

How to notarize a promissory note?

With the PandaDoc Notary platform, it is simple and quick to get your promissory note notarized along with other commonly notarized real estate documents, such as the power of attorney.

Some simple steps involved in getting a deed notarized through PandaDoc Notary include:

Step 1

You can take a picture of your promissory note or upload a PDF file from your computer. You can also upload from a cloud storage service, such as Dropbox. PandaDoc Notary has notaries ready to complete all your notary requests!

Step 2

Now, you just have to confirm your identity with PandaDoc’s verification process. The platform uses identification verification technology in order to verify government-issued photograph IDs and passports.

Step 3

You can connect to a live notary anytime and confirm your identity on a secure call or face-to-face on a webcam. Connect easily with a professional and licensed electronic notary public over live video in order to sign and notarize your promissory note. The PandaDoc Notary agent will verify your identity and witness your signature, assisting you throughout the process.

Notarize a promissory note with PandaDoc Notary

Promissory notes, also known as demand notes, are extremely valuable if you have to legally bind another individual to the terms and conditions of a transaction. A notary public or lawyer is publicly commissioned to act as an unbiased or impartial witness. A public notary’s duty includes verifying your identity as well as witnessing the act of signing a document.

When you need quick and secure notarization of any legal document or contract, use PandaDoc Notary. It’s the simplest and most affordable way to get your note signed and sealed. PandaDoc Notary’s mission is to make notarization simple, convenient, hassle-free, and secure for everyone. With a simple and convenient online platform and flexible times that fit your unique schedule, PandaDoc Notary makes things simple. Notarize your promissory note with PandaDoc and enjoy peace of mind! 


Is a loan agreement invalid if it is not notarized?

No. The loan agreement is still valid, provided it contains all the key parts, such as the names, addresses, and signatures of both parties. However, an extra witness or public official and an assurance of authenticity can strengthen the document. 

Do you have to re-notarize a promissory note after amending it?

Note that when you amend a promissory note, the borrower as well as lender have to re-sign the document. While the original copy of the document should stay in the records, the new loan document will take legal precedence.

Where to find reliable notary services for promissory notes?

You can have your loan agreement or document notarized by visiting:

  • An insurance firm
  • A real estate office 
  • Most banks, financial institutions, and credit unions

You may always get a document notarized at the courthouse during normal business hours.