Frequently asked questions about promissory notes – interest, transfer, and statute of limitations

By Mallbutiken · Facts verified October 1, 2026

A promissory note documents a payment obligation. The Promissory Notes Act distinguishes primarily between simple promissory notes and negotiable promissory notes. This guide answers the most common practical questions, debunking the myths about formal requirements that are often circulated regarding promissory notes.

What is a simple promissory note?

According to Section 26 of the Promissory Notes Act, a simple promissory note is issued to a specific person. If it is assigned, the new creditor, as a general rule, does not acquire better rights against the debtor than the assignor had.

What is a negotiable promissory note?

According to Section 11, promissory notes issued to the bearer or to a specific person or order are negotiable. The rules are designed for circulation and can provide a bona fide purchaser with stronger protection than in the case of a simple promissory note.

Must both lender and borrower sign?

It is misleading to say that the Promissory Notes Act generally requires both parties' signatures for validity. A promissory note is typically the debtor's written payment promise. For a separate loan agreement, however, both parties' signatures may be appropriate as proof of the agreed terms.

Must the promissory note be witnessed?

There is no general witness requirement in the Promissory Notes Act for a standard simple promissory note. Witnesses may have evidentiary value in certain cases, but should not be described as a general requirement for validity.

Must interest be stated in the promissory note?

If the parties want to have an agreed interest rate before the due date, the interest rate and the method of calculation should be clearly stated. The Interest Act complements the agreement and regulates, among other things, penalty interest. When Section 6 of the Act applies, the level is the reference rate plus eight percentage points.

When does penalty interest start to accrue?

If a debt has a predetermined due date, penalty interest according to Section 3 of the Interest Act can start to accrue from the due date if payment is not made. If no due date has been set, interest according to Section 4 can in certain cases start to accrue 30 days after the lender has sent a written demand for a specific amount with information about the interest terms, but not for the period before the demand reaches the debtor. Other rules may apply to, for example, certain business-to-business relationships and when legal measures are taken. Therefore, write down when the loan falls due and distinguish between the agreed loan interest and the interest for late payment.

How is penalty interest calculated?

If Section 6 of the Interest Act applies, the annual interest rate is the Riksbank's reference rate plus eight percentage points. The reference rate is determined every half-year according to Section 9 and may change. A promissory note should therefore not state an old percentage rate as if it always applies. For a calculation example with 10,000 SEK in overdue debt and an assumed annual interest rate of 10 percent in total, the simple interest for 30 days would be approximately 82 SEK (10,000 × 0.10 × 30/365). The example is illustrative, not a claim regarding the current reference rate or applicable contract interest.

See Interest Act sections 3, 4, 6, and 9 and check the Riksbank's current reference rate for the correct time period.

Can a simple promissory note be assigned?

Yes. It is incorrect to describe simple promissory notes as "non-assignable." They can be assigned, but the debtor's right of objection and the rules regarding payment to a previous creditor differ from those for negotiable promissory notes.

What happens when the debt is paid in full?

Document the final payment. For negotiable promissory notes, Section 21 states that the debtor does not have to settle the promissory note without the document being returned. For simple promissory notes, it is also wise to document that the debt has been settled and to keep a receipt or final confirmation.

How are installments and final payments documented?

Record every payment date, amount, which portion covers interest and which reduces the principal debt, and the remaining balance. The borrower should receive receipts for partial payments. When the debt is fully paid, a written final confirmation is important; if it is a negotiable promissory note, the general rule of returning the document according to Section 21 of the Promissory Notes Act must also be observed. An installment payment may in some cases constitute an interruption of the limitation period, but it does not automatically change other contractual terms.

For practical terms and choice of document, see the checklist for promissory notes and simple promissory note in Word/PDF (29 SEK).

When does the debt become time-barred?

The main rule in the Limitations Act is ten years from the inception of the debt if the limitation period is not interrupted. For certain consumer debts, three years applies, but the three-year rule does not apply to debts based on negotiable promissory notes.

Limitation can be interrupted by, among other things, acknowledgment or payment from the debtor, by the debtor receiving a written demand or reminder from the creditor, or by the debt being invoked in legal proceedings. When a new limitation period begins to run depends on the type of interruption: according to Section 6 for acknowledgment or demand, and according to Section 7 normally when legal proceedings have concluded. Read the updated guide on 3 years, 10 years, and limitation interruptions.

Does the promissory note become "invalid" when the debt becomes time-barred?

It is better to distinguish the concepts. According to Section 8 of the Limitations Act, limitation means that the creditor loses the right to demand payment of the debt. It is not the same as the document having been invalid from the beginning.