IOU template

How it works

1. Enter the amount, the date the money changed hands and whether it was cash or a transfer. The amount is written out in words for you.
2. Choose a repayment date, or monthly instalments and the first due date. With an interest rate, the schedule works out every payment.
3. Fill in both names and addresses. Anything else you agreed goes in the last box, in your own words.
4. Download the PDF, print a copy for each of you and sign. Lend by bank transfer where you can, so there is a record beside the paper.

Frequently asked questions

Is an IOU legally binding?

It is evidence that the money was lent and on what terms, which is usually what a dispute turns on. How far it goes on its own depends on where you are: in the US a signed, unconditional promise to pay is a promissory note; in England an IOU that only acknowledges a debt is evidence rather than a contract. For a large sum, a loan agreement signed by both of you is the safer paper.

What is the difference between the IOU and the loan agreement?

The IOU is one-sided: the borrower signs to say they owe the money and will repay it. The loan agreement is signed by both and sets out what each agreed. The loan agreement page makes that version.

Why is the amount written in words as well?

A figure can have a digit added to it; words cannot be changed without it showing. Where the two disagree, the words are usually taken as meant.

Do I have to charge interest on a family loan?

Not for the paper to be valid. In the US, though, an interest-free loan of more than $10,000 between family members can have tax consequences, because the IRS may treat the interest you did not charge as a gift. For larger sums, check the applicable federal rate or ask an accountant.

Is what I type uploaded?

No. The PDF is made in your browser and nothing you type leaves your device. Nothing of ours is printed on the paper.

Is this legal advice?

No. It is a form. For a large sum, or a loan you expect to be difficult, talk to a lawyer.