Document background
The Interest Only Promissory Note is a specialized financial instrument commonly used in the Philippines for both commercial and personal lending arrangements. It is particularly useful in situations where borrowers seek flexible payment terms, requiring only interest payments during the loan term with the principal amount due at maturity. This structure is common in real estate financing, business capital investments, and other scenarios where immediate full amortization is not desired. The document must comply with Philippine banking regulations, particularly the New Central Bank Act and Truth in Lending Act, which mandate specific disclosures and format requirements. This type of promissory note is especially relevant in the current Philippine market where both institutional and private lending activities are growing, and parties seek documented, legally enforceable lending arrangements with clear interest payment structures.
