IOU note template for lending money to a friend
Quick answer
An IOU note records who lent what, on which date, and how it will be repaid. Fill in both names, the amount, the reason and the repayment plan, then log every payment with a running balance and both sets of initials. It is a record between friends, not legal advice. A $300 loan repaid at $50 a month reaches $0 after 6 payments.
Key points
- Put both names, the date, the amount in numbers and words, the reason and the repayment plan on one page.
- Keep a payments log with a balance column: take each payment off the balance on the line above until it reads $0.
- Both people initial the note and every logged payment, and each keeps a copy or a photo of the page.
- When two friends lend back and forth often, a tracker that nets both directions replaces the paper log.
How to use this template
An IOU is short for “I owe you”: a written promise to pay back a debt. This page is the version for two friends. Fill in the note when the money changes hands, then log every payment on the same sheet. It is a record of what you both agreed, not legal advice.
- Fill in the note together. Write both names, the date, the amount and what it was for. Write the amount in numbers and in words, such as $300 and three hundred dollars, so one smudged digit cannot change it.
- Choose a plan you can both keep. Use one date, or a fixed payment on a fixed day. “$50 on the 1st for 6 months” is easier to keep than “when I can”.
- Both initial the note. Each person keeps a copy. A photo of the page counts as a copy.
- Log each payment the day it arrives. Write the date, the amount received and the balance still owed, then both initial the line.
- Close the note. When the balance reads $0, write “Paid in full” with the date, and both initial it.
The balance column is the only arithmetic: the balance on the line above, minus the payment on this line.
The template
The note
| Item | Fill in |
|---|---|
| Lender (who lent the money) | |
| Borrower (who owes it) | |
| Date lent | |
| Amount, in numbers | $ |
| Amount, in words | |
| What it was for | |
| How the money was handed over | |
| Repayment plan (one date, or an amount and a day) | |
| How payments will be made | |
| Extra charges (write “none” if none) | |
| Anything else we agreed |
| Person | Name | Initials | Date |
|---|---|---|---|
| Lender | |||
| Borrower |
Payments received
| Date | Received | Balance still owed | Initials |
|---|---|---|---|
| Loan of $ | $ | ||
| $ | $ | ||
| $ | $ | ||
| $ | $ | ||
| $ | $ | ||
| $ | $ | ||
| $ | $ | ||
| $ | $ |
Example, filled in
Say Ines lends Hector $300 on March 1, 2027 for a laptop repair. They agree on $50 on the 1st of each month for 6 months, paid by bank transfer.
| Date | Received | Balance still owed | Initials |
|---|---|---|---|
| Mar 1, 2027 | Loan of $300 | $300 | I, H |
| Apr 1, 2027 | $50 | $250 | I, H |
| May 1, 2027 | $50 | $200 | I, H |
| Jun 1, 2027 | $50 | $150 | I, H |
| Jul 1, 2027 | $50 | $100 | I, H |
| Aug 1, 2027 | $50 | $50 | I, H |
| Sep 1, 2027 | $50 | $0 | I, H |
Six payments of $50 add up to $300, and the balance falls by $50 on every line. The September line reads $0, so Ines writes “Paid in full” under it and both initial.
What to agree on
- The amount and the reason. “Laptop repair” is better than “stuff”. A specific reason keeps both memories the same a year later.
- A plan with dates. One date suits a short loan. For a bigger amount, a fixed payment on a fixed day tells you the number of payments up front: $300 at $50 is 6.
- How each payment travels. Name the way, whether bank transfer or cash. Whichever it is, the lender logs the payment on the day it arrives.
- What happens when a payment is late. Pick one step now, such as a text with a new date, instead of deciding at the moment it is missed. Wording for that text is in text messages to ask for money back, and what to do when a friend won’t repay covers the harder case.
- Extra charges. Write “none” if there are none, so neither person assumes otherwise later.
A paper log is fine for one loan. When the same two people lend and borrow back and forth, a running total is easier to keep in a tracker, and how to keep track of who owes you money shows the method. In EvenOut, once your friend has joined through your code or invite link, you add the loan as an expense you paid and split equally with your own name tapped to “Not in”, so the whole $300 sits on your friend’s share. The friend page then reads “Hector owes you $300”, and “Settle up” with a partial amount records each payment, so it reads $250 after the first $50. EvenOut records the payment and does not move the money.
Frequently asked questions
What if the borrower pays more than the plan one month?
Log the amount actually received and take it off the balance above. If the plan is $50 a month and Hector sends $100 in April, the balance drops from $300 to $200 instead of $250, and the last payment moves from September to August. Both people initial the line as usual.
Should I start a new note when I lend the same person more later?
Yes. Use a fresh page with its own date and balance. Adding a second amount to the first note mixes two repayment plans, while a page per loan always shows one amount, one plan and one balance.
Can I keep the note on a phone instead of paper?
Yes. Fill in the page on a screen, or photograph the initialed paper and send the photo so you both hold the same version. After each payment, photograph the updated log and send that too. The two copies need to match.
What do I write when the loan is repaid?
Write "Paid in full" under the last balance of $0, add the date, and both initial it. Then give or send the borrower a copy marked the same way, so neither of you is left holding an open note.
Sources
Checked October 6, 2026.
Keep reading
- Guide How to keep track of who owes you money Keep a ledger with one line per event and a running net for each person. See how $40 owed to you and $16.25 owed back becomes $23.75, and when to settle.
- Glossary Creditor and debtor: what it's called when someone owes you money The person owed money is the creditor and the person who owes it is the debtor. See the words in a two-person example where a $30.00 debt flips to $16.00.
- Template Text messages to ask for money back (copy and paste) Nine copy and paste texts to ask for money back: dinner, bills, trips, a loan, reminders, a final message and a thank-you, plus when to send each one.
- Glossary IOU: meaning and examples An IOU is a written note that says I owe you. See what dictionaries say, three examples from a napkin to an app balance, and how it differs from shared bills.
- Guide Friend owes you money and won't pay: what to do A five-step plan for a friend who won't pay: one written message, a payment plan worked out in numbers, a deadline, a last message and a decision.