Promissory Note (Loan) Release Form.

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The Importance of a Promissory Note Release in Loan Repayment​

If you have ever borrowed money, you will know that the lender requires you to sign a promissory note. A promissory note is a written document that outlines the specific details of a loan, including the borrower's obligation to repay the borrowed amount with interest. However, what happens after the loan has been repaid in full? This is where a promissory note release comes in; it releases the borrower of all further liabilities and obligations related to the loan.

The Purpose of a Promissory Note Release​

A promissory note release is a legal document that serves as proof that the borrower has fulfilled their repayment obligations under the terms of the promissory note agreement. By signing the release, the lender acknowledges that the borrower has repaid the loan in full and is released from any further obligations or claims relating to the promissory note.

Requirements for a Promissory Note Release​

A promissory note release should include certain information to be legally binding. The release should include the names of both the borrower and lender, the original date of the note, the date of release, the total amount of the borrowed money, and the lender's signature. Only the lender is required to sign the release.

What to do After Signing a Promissory Note Release​

Once you have signed the promissory note release, it is crucial to keep it in a safe and accessible place for future reference. If the lender ever attempts to claim the loan repayment was not satisfied, you will need the release document as proof that you met your obligations. Additionally, the release may be needed for IRS audit purposes to verify dates and figures related to loan repayment.

Sample Promissory Note Release​

Below is a sample of a promissory note release:

Release of Obligations​

I. The Parties. This Release of Obligations (“Release”) made on [DATE], releases the liabilities and obligations of:

• Borrower: [BORROWER’S NAME] with a mailing address of [ADDRESS] (“Borrower”) and:
• Lender: [LENDER’S NAME] with a mailing address of [ADDRESS] (“Lender”) and is acting as the releasor.

II. The Release. The Lender agrees to discharge the Borrower from any claims, liabilities, and obligations under the loan made on [DATE] in the amount of $[AMOUNT].

The Lender agrees to Release all parties connected to the original loan agreement, including, if any, co-borrowers, co-signers, and guarantors.

IN WITNESS WHEREOF, the Lender has executed this Agreement as of the day and year first above written.

Lender’s Signature: _____________________ Date: _____________

Print Name: _____________________

Conclusion​

Overall, a promissory note release is crucial to have when repaying a loan. It is a legal document that releases the borrower of all further liabilities and obligations related to the loan. By signing the release, the lender acknowledges that the borrower has repaid the loan in full, and is released from any further claims. Keep the document in a safe and accessible place, as it may be needed as proof of repayment in the future.

Frequently Asked Questions​

• Is a promissory note release legally binding? Yes, a promissory note release is a legally binding document.
• Who is required to sign the promissory note release? Only the lender is required to sign the release.
• Why is a promissory note release important? A promissory note release is important because it frees the borrower from further obligations and liabilities related to the loan.
• What should be included in a promissory note release? A promissory note release should include the names of both the borrower and lender, the original date of the note, the date of release, the total amount of the borrowed money, and the lender's signature.
• Do I need to keep a copy of the promissory note release? Yes, it is essential to keep the release in a safe and accessible place for future reference.

• Promissory Note (Loan) Release Form Download