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Secured Promissory Note

A secured promissory note is a legally binding document where the borrower pledges collateral -- such as a vehicle, real estate, equipment, or other valuable property -- to guarantee repayment of the loan. If the borrower defaults, the lender has the legal right to seize the collateral to recover the outstanding debt. Secured notes typically carry lower interest rates because the lender's risk is reduced. Every state has specific usury laws that cap interest rates, and our platform generates secured promissory notes tailored to your state's legal requirements.

Alabama
Max rate: 8%
Alaska
Max rate: 10.5%
Arizona
No usury cap
Arkansas
Max rate: 17%
California
Max rate: 10%
Colorado
Max rate: 45%
Connecticut
Max rate: 12%
Delaware
Max rate: 5%
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District of Columbia
Max rate: 24%
Florida
Max rate: 18%
Georgia
Max rate: 8%
Hawaii
Max rate: 12%
Idaho
No usury cap
Illinois
Max rate: 9%
Indiana
Max rate: 21%
Iowa
Max rate: 12%
Kansas
Max rate: 15%
Kentucky
Max rate: 19%
Louisiana
Max rate: 12%
Maine
No usury cap
Maryland
Max rate: 8%
Massachusetts
Max rate: 20%
Michigan
Max rate: 25%
Minnesota
Max rate: 8%
Mississippi
Max rate: 10%
Missouri
Max rate: 10%
Montana
Max rate: 15%
Nebraska
Max rate: 16%
Nevada
No usury cap
New Hampshire
No usury cap
New Jersey
Max rate: 16%
New Mexico
No usury cap
New York
Max rate: 16%
North Carolina
Max rate: 8%
North Dakota
Max rate: 12%
Ohio
Max rate: 8%
Oklahoma
Max rate: 10%
Oregon
Max rate: 12%
Pennsylvania
Max rate: 6%
Rhode Island
Max rate: 21%
South Carolina
Max rate: 8.75%
South Dakota
No usury cap
Tennessee
Max rate: 10%
Texas
Max rate: 18%
Utah
No usury cap
Vermont
Max rate: 12%
Virginia
Max rate: 12%
Washington
Max rate: 12%
West Virginia
Max rate: 8%
Wisconsin
Max rate: 12%
Wyoming
No usury cap

Frequently Asked Questions

What is a secured promissory note?

A secured promissory note is a written promise to repay a loan that is backed by collateral. If the borrower fails to repay, the lender has the legal right to claim the collateral (such as a vehicle, real estate, or equipment) to recover the outstanding debt.

What can be used as collateral on a secured promissory note?

Common types of collateral include motor vehicles, real estate, bank accounts, investment accounts, business equipment, or other valuable personal property. The collateral must be clearly identified in the note with enough detail to distinguish it (such as a VIN, legal property description, or account number).

What happens if a borrower defaults on a secured promissory note?

The lender may seize the collateral through the appropriate legal process (such as repossession for vehicles or foreclosure for real estate). If the collateral does not fully cover the outstanding balance, the lender may also sue for the remaining deficiency. Exact remedies depend on your state's laws.

Are there interest rate limits on secured promissory notes?

Yes. Most states have usury laws that cap the maximum allowable interest rate on loans. Charging above the usury cap can make the interest unenforceable and in some states may void the entire note. Your Promissory Note displays your state's usury limit and includes a savings clause to protect against unintended violations.

Create Your Secured Promissory Note

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Usury-compliant rates State-specific provisions Instant PDF download