IOU note template

IOU or promissory note

For larger sums or interest, the promissory note sample is the better fit.

What goes in an IOU

• The name of the person who owes.
• The name of the person owed.
• The amount in figures and in words.
• The date it will be repaid.
• The date written and the signature.

Pick «Monthly installments» above if the debt is repaid in parts.

An IOU worked out

Emma lends her friend Noah USD 800.00 for car repairs on 1 November.

Noah writes an IOU that he will repay the full amount by 31 January.

Emma keeps the signed note and sends a friendly reminder a few days before.

Keep it friendly and clear

An IOU protects a friendship as much as the money.

A written date avoids awkward guessing later.

«Hi Noah, just a heads-up that the USD 800 is due on 31 January. Thanks.»

Common mistakes

• No repayment date.
• Only the lender signs.
• Amount in figures only.
• Losing the note after part payments without writing them down.

When an IOU is used

• A friend or relative lends money for a repair or a bill.
• Flatmates split a deposit and one pays the other back later.
• A small shop lets a regular customer pay next week.
• A colleague covers a shared expense for a trip.

Most IOUs cover small sums between people who know each other.

For a business loan or a sum with interest, a promissory note fits better.

The IOU still works well as a quick record on the day the money changes hands.

It takes a minute to write and avoids doubt later.

Field by field

• Person who owes: the full name, such as Noah Bennett. A first name alone is hard to prove later.
• Person owed: the full name of the lender, such as Emma Clarke.
• Amount: USD 800.00 in figures and eight hundred dollars in words. Words stop later changes.
• Repayment date: a specific day such as 31 January 2027. Avoid «when I can».
• Installments: the number of payments and each amount if repaid in parts.
• Date and signature: the day written and the signature of the person who owes.

Variants of the same IOU

Each version changes one line of the note.

• In parts: «I will repay it in four payments of USD 200.00 on the last day of each month.»
• No interest: «No interest is due on this amount if repaid by the date above.»
• Shared deposit: «I owe [name] my half of the rental deposit, [amount], paid on [date].»
• Shop credit: «I owe [shop name] [amount] for goods taken on [date], payable by [date].»

A second example from the UK

Priya lends her flatmate Tom £450.00 for a train pass in Leeds.

Tom writes an IOU to repay £150.00 on the 1st of three months.

Priya writes each payment on the back of the note and both initial it.

Friendly reminders that keep the friendship

«Hi Tom, a quick note that the next £150 is due on 1 January. Thanks!»

«Hi Noah, just checking the USD 800 is still fine for 31 January. No rush before then.»

Send one message a few days before the date. Skip reminders once it is paid.

Closing the IOU

When the last payment arrives, write «Paid in full» and the date on the note.

Sign it and hand it back to the person who owed.

If the note is lost, a short signed message that confirms payment does the same job.

When the IOU is not repaid

Start with a friendly message the day after the date passes.

«Hi Noah, the USD 800 was due yesterday. Could you tell me a new date?»

Agree the new date and write it on the note with both initials.

If several dates pass, send a short letter with the amount and a final date.

Keep the note, the messages and any part payments together.

For a larger sum, take that file to a lawyer or a small claims service.

Make the IOU easy to prove

• Transfer the money by bank so a record exists.
• Write the IOU on the same day the money changes hands.
• Take a photo of the signed note and send it to both phones.
• Store the original somewhere safe until it is repaid.

Let the reminders go out on their own

Makatea sends a friendly reminder before the repayment date and records the payment. Try it free for 14 days, no card needed.