By changing sola, you want to know if the terms are negotiable. This statement should make it clear whether the borrower or lender is flexible in granting or repaying the money. Without this document, the lender or borrower may be frustrated if the other party does not keep its promise to give money or repay. If you are thinking of lending money to a friend or family member, there are other more formal options than this form, including a debt title or a loan agreement. Find out the difference between an IOU form, a change of funds and a loan agreement. An IOU, or «I Owe You,» is used by someone who lends money (the borrower) to officially document that they owe someone (the «lender»). Sometimes there are opportunities when friends or family members need a money loan and they come to you for the money. MSN financial columnist Liz Pulliam Weston advises people in this situation to make it a personal policy, not to lend money to friends or family because it weighs on their relationship. But many people find it difficult to refuse a request from their family and friends in distress. In this case, a contract (or change of sola) should be developed and signed by both parties to ensure that all debts are settled on time. The first step in establishing a loan contract is to decide on the nature of the proposed payment plan.

One option is to provide a loan with a catch-up that does not require interest. In this case, the person lending the money must repay the amount borrowed for the same amount over the period specified in the contract. To write a legal document for the money owed, start with a list of your name and address, with the same information for the borrower. Then indicate the payment rules based on the type of loan you provide. If you choose. For example, a temperable loan with interest, you indicate that the borrower will make x payments over a specified period, a portion of the payment going in the direction of interest. Then indicate if the loan is not guaranteed or guaranteed by guarantees. Finally, have the borrower sign and date the change of sola. For more information, including managing late or missed payments, keep reading. An IOU looks like a change of sola and a loan contract, but is generally not a negotiable document and does not contain details on the repayment and the consequences of non-repayment. When most people think of an IOU, I remember the idea of a towel in hand. Due to the presentation of IOUs in Hollywood, it does not have the greatest reputation as a legally binding document.

However, an IOU can be a powerful binding document if used as a refund agreement. As long as there is a lender and a borrower in a transaction, an IOU can be used to set repayment terms. Expect the borrower to miss at least one payment. Remember, if that person was good with the money, they shouldn`t have borrowed it from you. The Owing Party and the Owed Party intend to enter into an agreement under which the Owing Party will pay the sum of the defects on a payment plan as stated below. Make it clear what type of contract you are starting. When lending money, make sure that the phrase «contract» and/or «Promissory Note» appears at the beginning of the document so that there is no argument for the money to be a gift. An IOU allows both parties to account for the amount borrowed and determine when the money should be repaid.

Even if you are family, friends or colleagues, it helps everyone remember exactly how much money was borrowed in case the memories faded. Anyone who lends or borrows money for commercial or personal reasons should use a written form to protect themselves from unnecessary headaches.