Payment Clauses
Fixed Maturity—On a Certain Date
The Principal Amount is due and payable on [date], and the interest is due and payable [at maturity/monthly as it accrues/quarterly as it accrues/semiannually as it accrues/annually as it accrues/as follows: [specify]]. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
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The Principal Amount is due and payable [number] days after the date of this note, and the interest is due and payable [at maturity/monthly as it accrues/quarterly as it accrues/semiannually as it accrues/annually as it accrues/as follows: [specify]]. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Monthly Installments, Including Interest, until Fully Paid
The Principal Amount and interest are due and payable in equal monthly installments of [amount] DOLLARS ($[amount]), on the [specify] day of each month, beginning [date] and continuing until the unpaid principal and accrued, unpaid interest have been paid in full. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Monthly Installments, Including Interest, with Fixed Maturity and a Balloon Payment
The Principal Amount and interest are due and payable in equal monthly installments of [amount] DOLLARS ($[amount]), on the [specify] day of each month, beginning [date] and continuing until [the expiration of [number] years from the date of this note/[specify date]], when the entire amount of principal and accrued, unpaid interest will be payable in full. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
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The Principal Amount and interest are due and payable in equal monthly installments of [amount] DOLLARS ($[amount]), beginning [date], and thereafter on the [specify] day of each succeeding month through [date], and in one final installment on [date] in the amount of the unpaid principal and accrued, unpaid interest as of that date. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Monthly Installments, Including Interest, When Amount Changes at Certain Times
The Principal Amount and interest are due and payable in equal monthly installments of [amount] DOLLARS ($[amount]), on the [specify] day of each month, beginning [date] and continuing through [date]. After that date the unpaid principal balance and interest are payable in equal monthly installments of [amount] DOLLARS ($[amount]), on the [specify] day of each month, beginning [date] and continuing until the Principal Amount and accrued, unpaid interest have been paid in full. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Initial Installments of Interest, Followed by Installments of Principal and Interest and a Balloon Payment
Interest only is due and payable monthly as it accrues on the [specify] day of each month, beginning [date] and continuing through [date]. After that date the unpaid principal balance and interest are due and payable in equal monthly installments of [amount] DOLLARS ($[amount]), on the [specify] day of each month, beginning [date] and continuing until the expiration of [number] years from the date of this note. At that time the unpaid principal balance and accrued, unpaid interest will be payable in full. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Additional Installment to Be Paid on Principal within Certain Time
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The following sentence should be added before the last sentence of the payment clause if an additional installment will be paid within a specified time. |
An additional principal installment of [amount] DOLLARS ($[amount]) is due and payable [[specify] days after the date of this note/on [date]].
Monthly Installments of Principal, Plus Interest
The Principal Amount is due and payable in equal monthly installments of [amount] DOLLARS ($[amount]), on the [specify] day of each month, beginning [date] and continuing until the Principal Amount has been paid in full. Interest computed on the unpaid principal balance is due and payable monthly as it accrues, on the same dates as and in addition to the installments of principal. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Annual Installments, Including Interest
The Principal Amount and interest are due and payable in equal annual installments of [amount] DOLLARS ($[amount]), on [date] of each year, beginning [date] and continuing annually until the Principal Amount and accrued, unpaid interest have been paid in full. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Annual Principal Installments, Plus Interest
The Principal Amount is due and payable in equal annual installments of [amount] DOLLARS ($[amount]), on [date] of each year, beginning [date] and continuing annually until the Principal Amount has been paid in full. Interest on the unpaid principal balance is due and payable annually as it accrues, on the same dates as and in addition to the installments of principal. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
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The Principal Amount is due and payable in three annual installments, as follows:
the first, in the amount of [amount] DOLLARS ($[amount]), on [date];
the second, in the amount of [amount] DOLLARS ($[amount]), on [date];
the third, in the amount of [amount] DOLLARS ($[amount]), on [date].
Interest on the unpaid principal balance is due and payable annually as it accrues, on the same dates as and in addition to the installments of principal. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Semiannual Installments, Including Interest
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The Principal Amount and interest are due and payable in equal semiannual installments of [amount] DOLLARS ($[amount]). The first installment is payable on [date] and the others semiannually on the [specify] day of [month] and [month] of each year until the Principal Amount and accrued, unpaid interest have been paid in full. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Semiannual Principal Installments, Plus Interest
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The Principal Amount is due and payable in equal semiannual installments of [amount] DOLLARS ($[amount]), on the [specify] day of [month] and [month] of each year, beginning [date] and continuing semiannually until the Principal Amount has been paid in full. Interest on the unpaid principal balance is due and payable semiannually as it accrues, on the same dates as and in addition to the installments of principal. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Quarterly Installments, Including Interest
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The Principal Amount and interest are due and payable in equal quarterly installments of [amount] DOLLARS ($[amount]). The first installment is payable on [date] and the others quarterly on the [specify] day of [month], [month], [month], and [month] of each year until the Principal Amount and accrued, unpaid interest have been paid in full. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Quarterly Installments, Plus Interest
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The Principal Amount is due and payable in equal quarterly installments of [amount] DOLLARS ($[amount]), on the [specify] day of [month], [month], [month], and [month] of each year, beginning [date] and continuing quarterly until the Principal Amount has been paid in full. Interest on the unpaid principal balance is due and payable quarterly as it accrues, on the same dates as and in addition to the installments of principal. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Variable Rates—Commercial Transaction
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Interest will accrue at the rate per year that will be the lesser of [percent] percent ([percent]%) in excess of the Prime Interest Rate, adjusted [daily/on the first day of each calendar month] based on the Prime Interest Rate then in effect, or the maximum nonusurious rate of interest permitted by applicable law. [Include if applicable: At no time will the interest rate be greater than [percent] percent ([percent]%) or less than [percent] percent ([percent]%).]
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Select one of the following. |
The Prime Interest Rate means the annual rate of interest announced from time to time by [financial institution] as its base or prime commercial lending rate. If that rate ceases to be available, the Prime Interest Rate will be a reasonably comparable rate to be determined by Lender.
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The Prime Interest Rate means the annual rate of interest identified as the “U.S. prime rate” in the “Money Rates” column published in the Wall Street Journal. If the published prime rate is expressed on the applicable date as a range, the prime rate for purposes of this note will be the average between the high and low of that range. If the Wall Street Journal ceases to publish a prime rate, Lender may refer to another similar source to identify the prime rate on corporate loans at large United States money center commercial banks and apply that rate.
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Continue with the following. |
Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
Variable Rates—Residential Transaction
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The initial interest rate will be [percent] percent ([percent]%) per year, and it may change on the [specify] day of [month] [year] and on that day every [number] month[s] thereafter. Each date on which the interest rate could change is a “Change Date.”
Beginning with the first Change Date, the interest rate will be based on an index, which is [the weekly average yield on United States Treasury Securities adjusted to a constant maturity of one year as made available by the Federal Reserve Board/[state other index]].
The most recent index figure available as of the date forty-five days before each Change Date is the “Current Index.”
If the index is no longer available, a new index will be chosen by Lender on the basis of comparable information.
Before each Change Date, the new interest rate will be calculated by adding [number] percentage point[s] to the Current Index. The result of this addition will be rounded to the nearest one-eighth of 1 percent (0.125%). Subject to the limits stated below, this rounded amount will be the new interest rate until the next Change Date.
The amount of the monthly payment that would be sufficient to pay in full the Principal Amount remaining on the Change Date by the maturity date at the new interest rate, in substantially equal payments, will be calculated and will be the new amount of the monthly payment. Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount.
The interest will never be increased or decreased on any single Change Date by more than [number] percentage point[s] from the highest rate of interest that has been paid during the preceding twelve months.
The interest rate will never be greater than [percent] percent
([percent]%).
The new interest rate will become effective on each Change Date. The new monthly payment will be paid from the first monthly payment date after the Change Date until the amount of the monthly payment changes again.
Lender will notify Borrower of the new interest rate, new monthly payment amount, and due date of the first new monthly payment at least [number] days before the new monthly payment is due.