The shortest way to put a debt in writing. Fill in the amount and the date it is due, send one link, and the borrower signs.
An IOU is a signed acknowledgment that one person owes another a specific amount of money and will repay it by a stated date. It is shorter than a promissory note but, written this way, still enforceable.
Sign in to use this template · Set the few terms only you can, reword anything, and send it to be filled in and signed. The people you send to never need an account.
What it covers
The borrower’s acknowledgment of the amount owed, the date it was received and what it was for.
A single repayment date, with the option to pay early.
Interest or no interest, your choice.
What happens if it is not paid on time: the lender’s costs and interest from the due date.
You lent money to a friend, relative or coworker and want a record that it is a loan, not a gift.
You covered someone’s share of rent, a trip or a bill and they have promised to pay you back.
You are the borrower and want to reassure the lender by signing something.
The amount is small enough that a full promissory note feels like too much.
What it does not do
It is not an installment note. If the borrower will pay in monthly amounts, use the Promissory Note, which prints a schedule and a late fee.
It does not name collateral or a guarantor. For a secured loan, use the Promissory Note or Loan Agreement.
State usury limits still apply to any interest you enter. For a short personal loan, a rate under your state’s cap or no interest at all is the safe choice.
It is not legal advice. For anything above a few thousand dollars, the Promissory Note or Loan Agreement in this library gives both sides more protection.
Signing, witnesses and delivery
An IOU is binding when the borrower signs it. No witness or notary is needed. The lender signs to acknowledge the terms.
Keep the signed PDF with your record of the payment you made (a bank transfer, a screenshot). Together they show the loan was made and acknowledged.
The agreement
IOU (Acknowledgment of Debt)
This IOU is made by [Borrower full name], of [Borrower address] ("Borrower"), in favor of [Lender full name] ("Lender"). Borrower acknowledges that on [Date the money was received] Borrower received [Amount owed] from Lender for the following purpose: [What the money was for]. Borrower and Lender agree that this money was a loan and not a gift, and that Borrower will repay it on the terms below.
1. Acknowledgment of Debt
Borrower acknowledges owing Lender the sum of [Amount owed] (the "Debt") and promises to repay it in full. Borrower confirms that the amount stated is correct and that no part of it has been repaid as of the date Borrower signs. The Debt is due without any setoff, deduction or counterclaim, and Borrower has no defense to it.
2. Repayment
Borrower shall repay the Debt, together with any interest under Section 3, in full on or before [Repayment due date] (the "Due Date") by [How repayment is made], or as Lender otherwise directs in writing. Borrower may repay all or any part of the Debt before the Due Date without penalty. A payment is made when Lender receives it, and payments are applied first to any interest then due and then to the Debt. If the Due Date falls on a Saturday, Sunday or legal holiday, payment is due on the next business day.
3. Interest
Interest on the Debt: [Interest]. If interest applies, it shall accrue as simple interest on the unpaid Debt from the date the money was received until it is repaid, at [Annual interest rate (%) (or 0)] percent per year, and never more than the maximum rate permitted by law. If no interest applies, the Debt bears no interest before the Due Date.
4. Default
If the Debt is not repaid in full by the Due Date, the unpaid amount shall bear interest from the Due Date until paid at the rate stated in Section 3 or, if none, at the legal rate of interest in the governing state, and Borrower shall pay Lender’s reasonable costs of collecting it, including court costs and attorney fees, to the extent permitted by law. Lender’s acceptance of a late or partial payment is not a waiver of the right to the rest.
5. No Waiver; Assignment
Lender may extend the Due Date or accept a different arrangement in writing without releasing Borrower from this IOU, and no extension or indulgence waives any of Lender’s rights. Lender may assign this IOU to another person, who may enforce it as Lender could; Borrower may not assign it. Borrower waives presentment, demand, protest and notice of dishonor.
6. Governing Law; Entire Agreement
This IOU is governed by the laws of the State of [Governing law (state)]. It is the entire agreement between Borrower and Lender about the Debt and replaces any earlier conversation or message about it. It may be changed only in a writing signed by both of them. If any provision is unenforceable, the rest remains in effect. This IOU binds Borrower’s heirs and personal representatives and benefits Lender’s successors and assigns.
7. Electronic Signatures
This IOU may be signed electronically and in counterparts. The electronic execution record, timestamps and document fingerprints kept by the signing platform are conclusive evidence of its execution. Lender signs to acknowledge the terms; this IOU is binding on Borrower upon Borrower’s signature alone.
Signatures
Lender · Borrower
IOU FAQ
Is an IOU legally binding?
Yes, if it identifies the parties, states a definite sum, and is signed by the person who owes it. Courts treat a signed IOU as evidence of a debt and an agreement to repay it. What an IOU often lacks is a due date and terms for what happens on default, which is why this one includes both.
What is the difference between an IOU and a promissory note?
An IOU acknowledges a debt; a promissory note is a fuller promise to pay with a payment schedule, late fees, acceleration and often collateral. This IOU includes a due date, an interest choice and a default clause, so it sits between a bare note-to-self and a full promissory note. For payments over time, use the Promissory Note.
Should I charge interest?
You can, up to your state’s usury limit, and the IOU lets you choose. Most personal IOUs between friends or family carry no interest. If the amount is large and the loan will be outstanding for more than a year, charging at least the IRS applicable federal rate avoids the loan being treated as a gift for tax purposes.
Can I send this to the borrower to fill in?
Yes. Fill in the amount and the due date, leave the borrower’s name, address and email blank, and send it. The borrower completes those fields when they open the link, then signs. You see everything they entered before you countersign.
What if the borrower does not pay by the due date?
The IOU says interest runs from the due date at the stated rate or, if none, at the legal rate, and that the borrower pays reasonable costs of collection. For amounts within your state’s small claims limit, the signed IOU and proof of the transfer are usually all the evidence you need.