Free Promissory Note Template

Promissory Note Template

A promissory note is a written agreement between a lender and borrower that clearly outlines a promise to repay borrowed money, typically including interest. Easier to create than a standard loan agreement but still legally binding, it’s ideal for loans between friends, family, or acquaintances.

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Last updated June 4th, 2025

A promissory note is a written agreement between a lender and borrower that clearly outlines a promise to repay borrowed money, typically including interest. Easier to create than a standard loan agreement but still legally binding, it’s ideal for loans between friends, family, or acquaintances.

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By State

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Vermont
  • Virginia
  • Washington
  • West Virginia
  • Wisconsin
  • Wyoming

 

By Type (2)

  • Secured Promissory Note: Backed by collateral (like a vehicle or real estate). If unpaid, the lender can repossess and sell the asset.

 

What Should Be Included:

  • Parties: Names and addresses of the lender and borrower.
  • Borrowed Amount: Exact sum borrowed.
  • Interest Rate: Annual percentage charged for borrowing.
  • Maturity Date: When the loan plus interest must be fully repaid.
  • Security: Any asset pledged as collateral, if applicable.

 

How to Create a Promissory Note (4 Easy Steps):

  1. Agree on the Terms

    Decide and agree on:

  • Loan amount
  • Interest rate
  • Due date and repayment schedule
  • Late fees
  • Security (if any)
  • Co-signer (optional)
  • Default terms

  1. Decide if Secured or Unsecured

    Choose whether the loan will be backed by collateral. Secured loans protect lenders, especially when lending larger sums to borrowers with weaker credit.

  2. Complete and Sign the Document

    Download and customize the promissory note template. Both parties should sign (notarization recommended for larger loans). Digital signatures are acceptable.

  3. Manage Payments

    Borrower repays according to the agreed schedule. Keep clear payment records. Late payments should trigger an official notice. If the borrower defaults, the lender may claim any pledged collateral or take legal action.

 

Interest Calculation Quick Guide:

Always verify the legal interest rate limits in your state to ensure compliance.

  • Total Interest Owed:
    Principal Amount × Interest Rate × (Loan Period / 1 Year)
  • Total Repayment Amount:
    Principal Amount + Total Interest
  • Monthly Payment:
    (Principal Amount + Total Interest) ÷ Number of Months

 

Maximum Usury Rates: By State

STATE USURY RATE SOURCE
Alabama Not in writing: 6%
Written agreement: 8%		 § 8-8-1
Alaska Loans above $25,000: 10.5%
Loans below $25,000: 5%+ Federal Reserve interest rate		 § 45.45.010
Arizona Not in writing: 10%
Written agreement: No limit		 § 44-1201
Arkansas Non-consumer notes:  5% + Federal Reserve interest rate
Consumer notes: 17%		 § 4-57-104
California Personal/Family Loans: 10%
Other Loans: 10% OR 5% + Federal Reserve Bank of San Francisco interest rate		 Article XV “Usury”
Colorado Not in writing: 8%
Consumer loans: 12%
Max. usury limit: 45%		 §§ 5-12-103 & 5-2-201
Connecticut Limit: 12% § 37-4
Delaware Limit: 5%+ Federal Reserve rate § 2301
Florida Less than $500k: 18%
Greater than $500k: 25%		 §§ 687.03 & 687.071
Georgia Not in writing: 7%
$3k or less: 16%
$3k – $250k: No limit		 § 7-4-2
Hawaii Not in writing: 10%
Written agreement: 12%		 § 478-2 & § 478-4
Idaho Max. rate: 12%
Judgment rate: 5% + annual avg. yield of U.S. Treasury securities		 § 28-22-104
Illinois General Usury & Judgment rate: 9% 815 ILCS 205/4
Indiana Not in writing: 8%
Consumer loans: 25%		 §§ 24-4.6-1-101, 24-4.6-1-201, 24-4.5-3-201
Iowa Not in writing: 5%
Max rate: 2% + Avg. 10-yr maturity interest rate of US bonds & notes		 § 535.2
Kansas Legal interest rate: 10%
Usury limit: 15%		 §§ 16-201 & 16-207
Kentucky Legal interest rate: 8%
Usury limit: 4% + Federal Reserve rate OR 19% (whichever is less)
Greater than $15k: No limit		 § 360.010
Louisiana Usury limit: 12% § 3500
Maine Legal interest rate: 6% § 432
Maryland Not in writing: 6%
With contract: 8%
Usury limit: 24%		 §§ 12-102 & 12-103
Massachusetts Not in writing: 6%
Usury limit: 20%		 §§ 107.3 & 271.49
Michigan Not in writing: 5%
With contract: 7%
Usury limit: 25%		 §§ 438.31 & § 438.41
Minnesota Legal interest rate: 6%
Written agreement: 8%		 § 334.01
Mississippi Legal interest rate: 6%
Contract rate: 10% OR 5% + Federal Reserve rate (whichever is greater)		 § 75-17-1
Missouri Not in writing: 9%
Written agreement: 10%		 §§ 408.020 & 408.030
Montana Not in writing: 10%
Written agreement: 15% OR 6% + Prime rate published by Federal Reserve		 §§ 31-1-106 & 31-1-107
Nebraska Legal interest rate: 6%
Max rate: 16%		 § 45-101.03
Nevada Not in writing: Equal to the prime rate of largest bank in Nevada
Written agreement: No limit		 § NRS 99.040
New Hampshire Max rate: 10% (unless stated otherwise in contract) § 336:1
New Jersey Not in writing: 6%
Written agreement: 16%		 § 31:1-1
New Mexico Not in writing: 15% § 56-8-3
New York Legal interest rate: 6%
Usury limit: 16%		 GOB § 5-501
North Carolina Legal interest rate: 8% § 24-1
North Dakota Max interest rate: 6%
Max contract rate: 5.5% + current cost of money (cannot be less than 7%)		 §§ 47-14-05 & 47-14-09
Ohio Legal interest rate: 8% § 1343.01
Oklahoma Not in writing: 6%
Written agreement: No limit		 15 OK Stat § 15-266
Oregon Not in writing: 9%
Business/agric. loans less than $50k: 12%		 ORS 82.010
Pennsylvania Legal interest rate: 6% 41 P.S § 201
Rhode Island Max rate: 21% OR 9% + domestic prime rate § 6-26-2
South Carolina Legal interest rate: 8.75%
Written agreement: No limit		 § 34-31-20
South Dakota Not in writing: 12%
Written agreement: No limit		 §§ 54-3-4 & 54-3-16(3)
Tennessee Legal interest rate: 10% (unless stated otherwise in contract) § 47-14-103
Texas Legal interest rate: 10% (unless stated otherwise in contract) § 302.001
Utah Not in writing: 10%
Written agreement: No limit		 § 15-1-1
Vermont Legal interest rate: 12%
Other rates: See statute		 9 V.S.A. § 41a
Virginia Legal interest rate: 6%
Written agreement: 12%		 §§ 6.2-301 & 6.2-303
Washington Legal interest rate: 12% OR 4% + Avg. rate for 26-week treasury bills § 19.52.020
West Virginia Not in writing: 6%
Written agreement: 8%		 § 47-6-5
Wisconsin Legal interest rate: 5% § 138.04
Wyoming Not in writing: 7% § 40-14-106

 

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