Frequently asked questions
Short answers. Where the law is involved, the basis for the answer is given below it.
Before signing
Does the promissory note need a notary?
No. German law prescribes no form for a loan between private individuals.
Is it enough to send the PDF by email?
No. Print it and both sign it by hand. Only a signed document is full evidence in court. For an acknowledgement of debt, electronic form is even expressly excluded.
Basis: § 416 ZPO, § 781 BGB
Who has to sign?
At least the person borrowing the money. Better still, you both sign, on two copies, one for each of you.
Cash or bank transfer?
A transfer is easier to prove. In one case before the Higher Regional Court Cologne, a transfer shortly after the agreement was enough as proof, even though the reference did not say "loan".
Basis: OLG Köln, 16 U 106/16
Do we need a witness?
It is not required. With cash, a witness can later confirm that the money was handed over.
Can we agree on a place of jurisdiction?
Usually not. Private individuals may only do so in exceptional cases, for example once a dispute already exists. That is why the generator leaves the clause out.
Basis: § 38 ZPO
Interest and tax
Do I have to charge interest?
No. Interest is only owed if you agree on it. The generator then states "interest-free" in the agreement.
Basis: § 488 BGB
How high may the interest be?
There is no fixed cap. An extortionate rate, however, makes the agreement void, which is decided case by case.
Basis: § 138 BGB
Do I have to pay tax on the interest?
Generally yes. In Germany, interest from a private loan counts as investment income.
Basis: § 20(1) No. 7 EStG
Is an interest-free loan within the family a gift?
The interest saved can count as a gift. Tax-free allowances apply, for children for example EUR 400,000 within ten years. For large sums, tax advice is worthwhile.
Basis: Federal Fiscal Court, II R 20/22, § 16 ErbStG
Repayment and disputes
What if we have no repayment date?
Then the money only falls due when one side gives notice. The notice period is three months.
Basis: § 488(3) BGB
When does the claim become time-barred?
After three years, counted from the end of the year in which it fell due. Without a fixed date that only starts after notice. Every instalment restarts the period.
Basis: Federal Court of Justice, IX ZR 129/17, § 212 BGB
What happens if payment is late?
Whoever misses the agreed date is in default, without a reminder being needed. Default interest then applies, currently 6.52 % per year.
Basis: §§ 286, 288 BGB, Bundesbank base rate
What should we do after repayment?
Whoever paid back receives a receipt and gets the promissory note back.
Basis: §§ 368, 371 BGB Receipt template
The other side says it was a gift. What now?
That is exactly what the promissory note is for. Without it, whoever wants the money back has to prove it was not a gift, and that often fails.
Basis: Federal Court of Justice, X ZR 150/11
About this site
Are my entries stored?
Only if you tick "Remember my entries on this device", and then only in your browser. They are never sent to us or anyone else. "Clear form" deletes them.
What does Google Analytics learn?
Only if you allow statistics: which pages were visited. Google never learns what you enter. Without consent, Google is not loaded at all.
Does it cost anything?
No. The generator and the templates are free and need no sign-up.
Is the agreement legally watertight?
No generator can promise that. The agreement covers simple cases. For large amounts, collateral or a dispute, have it checked by a lawyer.
More about the lawThe full legal picture with statutes and court decisions is on one page.
Go to the law page