28 Free IOU Templates & Forms [I Owe You] - TemplateArchive

An IOU is short for “I owe you” and it’s an acknowledgment of a debt to another entity or party. An IOU template is a basic solution when you want to document a transaction sans the complexities of confusing paperwork. Those who use IOUs trust each other like friends, family members or business partners.


IOU Templates












What is IOU form?

An IOU form is a short document that contains information about the money owed by an entity or individual to another. Since this is a simple solution for two parties who want to settle a transaction without the involvement of complex paperwork, creating the document is very easy.

One of the most important aspects in this document is the already established trust between the two parties. Without it, a simple IOU might not be enough.

What to include?

The most common thing that comes to mind when we speak of an IOU template is a piece of paper or napkin with some words scribbled on it. For this, the IOU has gained a notorious reputation. People don’t even think of them seriously.

In reality, this simple document is very powerful as you can use it to enter into an agreement with someone else. As long as you (as the lender) and the borrower perform an IOU transaction, you can use the document to set the terms and conditions of the borrower’s repayment.

This becomes very important for having a written document of the transaction rather than a mere handshake. An IOU note is quite but it should still include the following important information:

  • Details about the parties involved
    This includes the complete names, home or business addresses, and the contact details of the parties involved – the lender and the borrower.
  • Payment information
    Indicate the amount of the loan and other relevant payment information like the minimum payments, the payment due dates, interest rates (if any), and late fees. Also, include the payment methods that you accept like cash, online payment or bank deposit.
    For this information, you may add as many details as you want. For example, you may specify if the borrower should make payments each month and inform you when they have already made their payments. You can also specify the amount of the payment and any fees that the borrower must pay when they make late payments.
  • Your signature and the signature of the borrower
    For the IOU to become legally binding, it should contain the signatures of both of the parties involved. After you have finalized the document, make sure that the other party should affix their signature too.
  • Any details about the termination
    You may include any details on what would happen should the borrower default on the loan. For example, you can gain ownership of collateral, the collection of additional fees or the debt’s acceleration.
  • Have a notary public affix their signature
    This requirement depends on the state where your transaction takes place because not all of the states require a notary public’s signature to make the document enforceable. Even if it isn’t required, it’s still recommended to have this document notarized, especially if you’re loaning a large amount of money.

IOU Forms











When do you need it?

An IOU template allows both you and the borrower to document the amount of the loan while clarifying when the loan should get repaid. Even if the transaction is between family members, friends or business colleagues, it’s recommended to have this document.

It helps everyone involved to remember exactly the amount of money borrowed in case memory fails. Here are some of the most common situations when you might need this document:

  • You have conducted business with a person in the past and you’re willing to accept an IOU.
  • You don’t have enough money to pay for something you want to buy so you give the person an IOU for the rest of the money.
  • You need to borrow money to pay a down payment for a special event.

A basic IOU form usually indicates the amount of money borrowed and when the borrower will pay you back with interest if any. Without the simple document, either of you might become frustrated in case the other party doesn’t fulfill your promise to lend the money or pay back the money.

How do I make an IOU?

You can create a simple, yet powerful IOU template by just downloading a template online. Or you can make a template from scratch if you have the skills. Here are the things to include when making an IOU note in your computer:

  • Include the names of the debtor, creditor, and the loan amount
    Add the name the debtor’s or borrower’s name, the creditor’s or lender’s name, and the loan amount in numeric and written form.
  • Specify the repayment terms
    This section requires information about how the money will get repaid. For instance, the borrower might repay the loan in monthly installments. If the loan is to get paid off in one payment, simply input the full amount.
    To complete this section, input the final date in which the money must get paid off and the date in which you should sign the IOU form.
  • Sign the document
    For the document to become legally binding, the signatures of the involved parties – the borrower and the lender – are both required. Since some states require a notary public’s signature on the IOU to become valid, you have to check your state laws to make sure you know them.
  • If applicable, have the document notarized
    Even if your state laws don’t require the signature of a notary public on the document to become valid, it’s still recommended to have it notarized as it gives a higher level of protection to both you and the borrower. You should both be with the notary public during the signing of the IOU.

IOU Notes









Does an IOU stand up in court?

The IOU serves as written proof of debt and if the borrower signed this, it will serve as evidence in court. As documentary evidence of the debt, an IOU with signatures is as good as a promissory note but with a simpler format and wording. This simply means that you can use this document in court as needed.