Legal Question in Credit and Debt Law in Pennsylvania

Any loan should be evidenced by a document known as a promissory note. It will detail the essential terms to assure that the agreement to repay is enforceable. Essential terms include, but may not be limited to, the amount, interest rate charged, term of repayment, and what happens in the event of default.

I suggest that you consult with an attorney to prepare the Note and I would be happy to advise you by phone or in person on a free initial basis.

You are not going to like this answer. I would NOT loan a large amount of money but only enough that if the borrower never pays you back it will not cause a hardship in your life. While everything is hunky dory now, things are going to go south here. What is going to happen if the debtor does not repay you? A piece of paper, called a promissory note, will help but is no guarantee that you will be repaid in the event of a default.

You need to include all of the things mentioned by Attorney Nahrgang in your promissory note. You also might want to consider taking some security here for the loan in case the borrower is thinking about defaulting someday. Could be a lien on the car title if the car is owned free and clear or another valuable asset. In that case, you would also need a security agreement and would have to file a UCC statement.

Why exactly does the borrower need to borrow a large sum of money? What is the borrower's income and ability to repay? You really need to think about all of this stuff. You also do need to consult with an attorney to make sure the interest rate is reasonable and complies with PA law if the borrower is in PA.

This has disaster written all over it even if you take steps to protect yourself. I would strongly urge you to discuss this withj an attorney and reconsider.