Document background
The Interest Only Promissory Note is a specialized debt instrument commonly used in Swiss financial transactions where the lender provides a loan to be repaid with regular interest payments, while the principal amount remains outstanding until maturity. This document type is particularly useful in scenarios where the borrower requires payment flexibility or when the underlying asset or investment is expected to generate regular income sufficient to cover interest payments. The document, governed by Swiss law, particularly the Swiss Code of Obligations, includes essential elements such as the principal amount, interest rate, payment terms, and maturity date. It's frequently used in real estate financing, corporate lending, and private banking arrangements within Switzerland. The structure provides clarity on the obligations of both parties while ensuring compliance with Swiss banking and financial regulations.
