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No Interest Promissory Note Template for Saudi Arabia

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Key Requirements PROMPT example:

No Interest Promissory Note

"I need a No Interest Promissory Note under Saudi law for a business loan of SAR 500,000 to be repaid in 12 monthly installments starting March 2025, with my brother-in-law acting as guarantor."

Document background
A No Interest Promissory Note is commonly used in Saudi Arabia for business transactions and personal loans that need to comply with Islamic financial principles. This document type is particularly relevant when parties wish to formalize a debt obligation while ensuring Sharia compliance. The note typically includes the principal amount, payment terms, parties' information, and explicit statements regarding its interest-free nature. It's used in various contexts, from business financing to personal loans, and must conform to both Saudi Arabian Commercial Papers Law and Islamic law principles. The document serves as evidence of debt and can be used for enforcement purposes in Saudi courts, making it a crucial tool for interest-free financial transactions in the Kingdom.
Suggested Sections

1. Date and Place of Issuance: Specifies the date and location where the promissory note is issued, which is crucial for validity under Saudi law

2. Parties' Information: Full legal names, addresses, and identification details of the maker (promisor) and payee (promisee)

3. Promise to Pay: Unconditional promise to pay a specific sum, explicitly stating this is interest-free (Qard Hassan)

4. Payment Amount: The principal amount in numbers and words, specified in the relevant currency

5. Payment Terms: Due date(s) for payment and whether it's a single payment or installments

6. Place of Payment: Specific location or method where payment should be made

7. Sharia Compliance Statement: Express declaration that the note is interest-free and compliant with Islamic principles

Optional Sections

1. Guarantor Details: Information about any guarantor(s) and their obligations, used when additional security is required

2. Default Provisions: Specific consequences of default, used when more detailed default terms are needed

3. Acceleration Clause: Conditions under which the entire amount becomes immediately due, included when installment payments are involved

4. Transfer Rights: Terms regarding the transferability of the note, included when the note needs to be negotiable

5. Notice Requirements: Specific requirements for serving notices, included when formal communication procedures are needed

Suggested Schedules

1. Payment Schedule: Detailed breakdown of installment amounts and due dates, if applicable

2. Guarantor Acknowledgment: Separate signature page for guarantor(s) if applicable

3. Supporting Documents: List of any referenced documents or security agreements

4. Specimen Signatures: Official signatures of all parties for verification purposes

Authors

Alex Denne

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

Relevant legal definitions

















Clauses

















Relevant Industries

Islamic Banking

Real Estate

Construction

Manufacturing

Retail

Family Business

Small and Medium Enterprises

Agriculture

Healthcare

Education

Non-profit Organizations

Professional Services

Relevant Teams

Legal

Finance

Compliance

Treasury

Credit

Risk Management

Corporate Secretariat

Business Development

Account Management

Islamic Banking

Relevant Roles

Legal Counsel

Finance Manager

Compliance Officer

Islamic Finance Specialist

Chief Financial Officer

Treasury Manager

Credit Manager

Risk Officer

Corporate Secretary

Business Development Manager

Account Manager

Contract Administrator

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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