It is a legally binding written promise to repay a loan. This loan document specifies the amount, interest rate, payment schedule, late fees, and default provisions. Under California Civil Code §1624, a promissory note must be in writing if the loan exceeds $500 or takes more than one year to repay. If you're searching for promissory note preparation near me in San Jose or the Bay Area, TrustPoint can help.
A secured promissory note is backed by collateral — often paired with a trust deed for real estate. An unsecured note relies solely on the borrower's promise to pay.
TrustPoint prepares your note for $100 — secured or unsecured. Need real estate collateral? Add a trust deed for $400 and we e-record same day.
Why You Need One
A Handshake Won't Hold Up in Court
A properly drafted agreement protects both lender and borrower with clear, enforceable terms under California law.
Whether you are lending money to a family member, financing a property purchase privately, or structuring a business loan, a written agreement is essential. California law requires any loan over $500 to be documented in writing. Here are the most common situations where Silicon Valley residents and Bay Area professionals need this service:
Family & Personal Loans Parents lending to children for a down payment, siblings splitting an inheritance property, or friends helping with medical expenses. Whether it's a personal loan agreement between family members or a formal lending arrangement, a written document prevents misunderstandings and protects relationships.
Private Real Estate Lending Private lenders in San Jose and the Bay Area who finance property purchases outside of traditional banks. Often paired with a deed of trust to record a lien on the property.
Seller Financing When the seller carries back a loan for the buyer instead of requiring full bank financing. Common in Silicon Valley commercial real estate transactions.
Business-to-Business Loans Startups and small businesses in the Bay Area borrowing from investors, partners, or other companies. May include equity conversion provisions or milestone-based disbursements.
Debt Restructuring Converting an existing informal loan into a formal written agreement with new payment terms, interest adjustments, and enforceable default provisions.
Secured vs Unsecured
Which Type Is Right for Your Loan?
Choosing between a secured and unsecured note depends on the loan amount, the relationship between the parties, and the level of risk the lender is willing to accept.
Secured Note
Backed by collateral — typically real property recorded through a trust deed. If the borrower defaults, the lender can foreclose on the property. Best for large loans, real estate transactions, and situations where the lender needs maximum protection. In California, the collateral must be clearly described in the agreement and properly recorded with the county.
No collateral attached. The lender relies on the borrower's promise to repay. If the borrower defaults, the lender must pursue collection through court action rather than foreclosure. Best for smaller loans between family members, friends, or trusted business partners where the relationship provides a degree of trust beyond the written agreement.
Cost:$100 (note) + $15 (notarization per signature)
A legally binding written promise to repay a loan — specifying loan amount, interest rate, payment schedule, late fees, and default provisions. Under California Civil Code §1624, it must be in writing if the loan exceeds $500 or repayment takes more than one year.
Secured vs unsecured — what's the difference?
A secured note is backed by collateral — often real estate via a recorded trust deed. An unsecured note has no collateral. Secured notes offer stronger lender protection.
What interest rate can I charge in California?
California usury law limits interest to 10% per year for most personal loans. Banks and licensed brokers are exempt. Business-to-business loans may differ. We draft the document with correct interest provisions.
Do I need a deed of trust too?
Only if the loan is secured by real estate. A trust deed ($400) records a lien on the property, giving the lender foreclosure rights. For unsecured loans, the note alone is sufficient.
Is a promissory note legally enforceable?
Yes — a properly executed promissory note is a legally binding contract enforceable in California courts. The statute of limitations is 4 years from default (Code of Civil Procedure §337).
How quickly is it ready?
Same day. Submit your intake form, we prepare the note, you sign — done. Need real estate security? We prepare and e-record that same day too.
Are you an attorney?
No. TrustPoint is a registered Legal Document Assistant (LDA #268, Santa Clara County). We prepare documents at your direction but cannot provide legal advice. About us.
Can I use a promissory note for a family loan?
Yes — and you should. Even between family members, a written loan agreement protects both parties and prevents misunderstandings about repayment terms. The IRS may also require documentation for loans over certain thresholds to distinguish gifts from loans.
What happens if the borrower defaults?
With a secured note backed by a trust deed, the lender can initiate non-judicial foreclosure on the property. With an unsecured note, the lender can pursue a court judgment and collection action. Either way, a properly drafted agreement gives the lender clear legal remedies including acceleration of the full balance, collection of attorney fees, and recovery of late charges.
Need Your Note Prepared Today?
Complete our intake form in 10 minutes. $100 flat fee. Add a deed of trust ($400) for real estate-backed loans.
IMPORTANT: TrustPoint Disability & Legal Services LLC is a registered and bonded Legal Document Assistant (LDA #268, Santa Clara County). We are not attorneys. We prepare documents at your specific direction. We do not provide legal advice or representation. 434 Blossom Hill Rd, San Jose, CA 95123 · 408-766-3532 · info@trustpointdisabilityandlegalservices.com
