Iowa Promissory Note Templates

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An Iowa promissory note is a legally binding document that says the borrower promises to repay a lender a certain amount of money within a given period of time. The promissory note details terms of a loan, such as interest, fees, and the amount of the loan. In Iowa, a promissory note can be either secured or unsecured.

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1 Iowa Secured Promissory Note
2 Iowa Unsecured Promissory Note
3 Frequently Asked Questions

Iowa Secured Promissory Note

When a borrower signs a secured promissory note, they agree to relinquish any property or asset to the lender if they fail to repay the loan. Thus, the lender will stand to gain something if the borrower defaults on the loan.

Iowa Secured Promissory Note - Templates.Legal
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An example of a secured promissory note is financing a car. If a borrower does not pay, the lender can repossess the vehicle.

Iowa Unsecured Promissory Note

It can be more challenging to collect from an unsecured promissory note. This is because unsecured promissory notes offer no protection to the lender for an unpaid debt.

Iowa Unsecured Promissory Note - Templates.Legal
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However, you can find an unsecured promissory note template for Iowa and fill it in yourself. Free Iowa promissory notes are available online, and the promissory note template in Iowa is straightforward.

Frequently Asked Questions

A promissory note in Iowa is valid for 10 years. Therefore, if a lender wants to collect on a promissory note, then he or she must file a lawsuit within 10 years after a borrower has become delinquent on their payments.

There are various remedies for lenders seeking to enforce a promissory note in Iowa if a borrower defaults on a loan. However, whether the promissory note is secured or unsecured can determine its enforceability. If other methods (i.e. offering an extension, hiring a collection agency, etc.) fail, the lender can file a lawsuit as a last resort.

In Idaho, the borrower records a promissory note by debiting the cash account and crediting the notes payable account.

For any income a lender generates from a promissory note, it must be reported to the IRS. The amount of taxes paid on the promissory note depends on the interest rate on the loan.

In Iowa, a lender can collect from a promissory note in a few ways:

  1. Offer an extension. Although not obligated to do so, a lender can give the borrower more time to make a payment on the loan. Another option is to foreclose on the loan, which requires the borrower to pay the loan back in full.
  2. Repossess the collateral. A lender can seize the collateral from the borrower and sell it to satisfy the loan. However, this is only allowed under a secured promissory note. Also, the proceeds may not fully cover the amount owed.        
  3. Use a professional collection agency. A collection agency can help the lender obtain payment of the promissory note debt.

Depending on the terms of the purchase agreement, either the buyer or seller is responsible for paying documentary stamp taxes on promissory notes for mortgages.