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Unsecured Loan Note Template for Singapore

An Unsecured Loan Note is a legally binding document governed by Singapore law that evidences a debt obligation where the borrower promises to repay a specified sum to the lender, without providing any collateral or security. The document details the loan amount, interest rate, repayment terms, and obligations of both parties, complying with Singapore's Moneylenders Act and relevant financial regulations.

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What is a Unsecured Loan Note?

The Unsecured Loan Note serves as a formal documentation of debt where no assets are pledged as security. Used extensively in Singapore's business environment, it provides a clear framework for loans between parties while complying with local regulatory requirements. The document typically includes essential terms such as principal amount, interest rates (subject to Singapore's regulatory caps), repayment schedule, and default provisions. It's particularly relevant when parties seek a straightforward lending arrangement without the complexity of security documentation, while still maintaining legal enforceability under Singapore law.

What sections should be included in a Unsecured Loan Note?

1. Parties: Identification and details of lender and borrower

2. Background: Context of the loan arrangement and relationship between parties

3. Definitions: Key terms used throughout the document

4. Loan Amount and Purpose: Principal amount and intended use of funds

5. Interest Rate and Calculations: Interest rate, calculation method, and payment frequency

6. Repayment Terms: Payment schedule, method, and currency

7. Events of Default: Circumstances constituting default and consequences

8. Representations and Warranties: Standard declarations by borrower regarding capacity and authority

What sections are optional to include in a Unsecured Loan Note?

1. Early Repayment: Terms and conditions for early loan settlement, including any prepayment penalties or notices required

2. Assignment: Provisions governing the transfer or assignment of the loan to third parties

3. Costs and Expenses: Allocation of transaction costs, legal fees, and other expenses related to the loan

What schedules should be included in a Unsecured Loan Note?

1. Repayment Schedule: Detailed schedule showing payment dates, amounts, and breakdown between principal and interest

2. Interest Calculation Examples: Sample calculations demonstrating how interest is computed under various scenarios

3. Form of Notice: Standard templates for formal notices and communications between parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Singapore

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use

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