I will pay: what is it for, how and when is it used?

The I will pay It is one of the terms that is most related to loans. It is a written document that demonstrates the commitment of a client to comply with the payment of the debt what’s wrong with it.

This accounting document is used as a solid guarantee that payments between entities or natural persons will be fulfilled. Nowadays, the promissory note tends to give confidence to whoever requests it. Therefore, in this note we tell you how and when to use it.

What is a promissory note for?

The promissory note is used to record that the agreed money for a product or service will be paid. The objective is that the two parties establish the conditions of the same so that this credit title does not lose the security on which it is based.

In this way, this document grants a collection right to the holder (fork) of the same. Meanwhile, the person, whether natural or legal, provides it to his creditor in order to acknowledge a debt and agrees to pay it on the date and place previously agreed.

How to use a promissory note?

To use the transmission of a promissory note correctly, the following must be done:

• Specify the number of the promissory note being issued
• Indicate the amount to be paid by the issuer. You must add even the pennies
• Specify when and where the promissory note was issued. That is, to detail the current place where the operation is carried out and the date
• Add in letters the amount of money that you placed on top. Currency must be specified
• Detail the amount, percentages and interest to be charged in case of defaults
• Place the issuer’s signature
• Finally, place on the back of the promissory note the data of a person who supports the operation (guarantor)

Keep in mind that it is always important to seek the advice of a lawyer regarding the convenience or not of processing this title of credit and the situations that may arise in the case.

When is a promissory note used?

One of the main benefits that the issuer of the promissory note has is the term it obtains to pay it, because when this accounting document is issued, a date is established. Until it passes the same, it is not necessary to disburse the agreed economic amount.

For its part, for the holder of this written document its main advantage is to have the trust and transparency that the collection will make in a set time. It should be noted that it is possible that the issuer of the promissory note (freed) comply with the payment of the sale or service made before the agreed date.

The promissory note is a binding legal contract. Therefore, the issuer is obliged to comply with the delivery of the agreed money. Failure to do so, a judge will decide in favor of the borrower.

This written document can only be issued if the two parties involved agree. In addition, it is usually used when the commercial relationship is consolidated. However, if the relationship is new and it is unknown whether the other party has sufficient funds to fulfill it, the commitment may raise doubts.

Who is involved in a promissory note?

In a I will pay at least four participants must participate.

• The drawee: He is the one who agrees to pay the sum of money on a certain future date.
• Holder or Beneficiary: natural or legal person who will collect the amount of the promissory note.
• The guarantor: person who guarantees the payment of the promissory note.