What is a Note Agreement?

Article Details
  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 06 October 2018
  • Copyright Protected:
    Conjecture Corporation
  • Print this Article

A note agreement is a contract between a lender and a borrower. Note agreements spell out the terms of a loan or credit agreement, including the rights and responsibilities of both parties. Such agreements can be used in the event of the need for enforcement of the loan agreement or when disputes arise about the terms. It is important to keep original copies of note agreements in a safe place in case they need to be referenced in the future.

The terms of lending agreements can be highly variable. Most lenders use generic note agreements with certain specifics adjusted to describe the terms of a given contract. The note agreement details how much money is being offered and at what rate, and it also provides information about repayment terms. Complete identifying information for borrower and lender is listed and the document is signed by people authorized to represent both parties, or by the parties themselves.

In addition to providing information about the basic terms of the loan, a note agreement can also information about what will happen in the event of default, bankruptcy, and other events. This can include claims on assets, the right to repossess and sell the object purchased with the loan, and other measures. It is important to read note agreements carefully to understand the consequences of activities such as neglecting to pay off the loan.


Note agreements can be used for a wide variety of types of debt. Laws about borrowing, lending, and other aspects of the financial industry vary worldwide, but may include limits on usury, requirements to disclose privacy protections, and other terms that can impact the drafting of a loan agreement. Consumers should familiarize themselves with the law to protect themselves. If a proposed agreement appears to violate the law, is unclear, or does not fit with the terms offered originally, the consumer should not sign the note agreement, instead asking to have the matter resolved before entering into the contract.

In the event a note agreement is lost, borrowers can request a duplicate copy from the lender. People may find it helpful to keep originals of loan agreements, titles, and other important documents in a safe place like a safe deposit box, with copies kept at home in a filing system. This provides quick access to reference information while keeping original documents secured. If thefts or damages occur, people can rest assured that their original documents have not been lost, stolen, or destroyed.



Discuss this Article

Post your comments

Post Anonymously


forgot password?