Generate a legally compliant Demand Promissory Note for California that covers all required terms under California promissory note law. Fill in your loan details and download your completed, ready-to-sign Demand Promissory Note as a professional PDF.
California law governs promissory notes with specific usury limits and enforcement rules that secures both creditor and borrowing party. The usury limit in California is 10% for personal loans by written contract. Lenders have 4 years to file suit to collect on a promissory note in California. California law requires 3 specific elements in a valid promissory note.
California Promissory Note Requirements
Max Interest Rate 10%
Rate Details 10% for personal loans by written contract
Usury Penalty Treble interest penalty; criminal misdemeanor possible
Statute of Limitations 4 years
Notarization Recommended
Witnesses Recommended (1)
Governing Agency California Superior Courts
Required Elements Written agreement signed by borrower; Demand notice period; Interest rate disclosure
What to Include in a California Demand Promissory Note
Every Demand Promissory Note in California should include the following vital provisions: the full legal names and addresses of both the note holder and borrower, the principal loan amount, the interest rate (which must not exceed 10% for personal loans by written contract under California law), the repayment schedule and due dates, any late payment penalties, the consequences of default, and the governing law clause. A demand note should clearly state that repayment is due upon the lender's written demand, with any minimum notice period the parties have agreed to before demand is made.
California requires the following elements in a valid promissory note: written agreement signed by borrower, demand notice period, interest rate disclosure.
How to Complete a California Demand Promissory Note
To complete a Demand Promissory Note in California, start by gathering the necessary information: the full legal names and addresses of both parties, the loan amount, the agreed-upon interest rate (must be at or below 10% for personal loans by written contract in California), the repayment terms, and any collateral details if applicable.
Our platform walks you through each section with a guided form tailored to California requirements. Once you have filled in all details, you can preview the document, choose from five professional document styles, and download your completed Demand Promissory Note as a PDF.
Frequently Asked Questions
What is the maximum interest rate for a promissory note in California?
California caps interest at 10% for personal loans by written contract. Charging above the legal limit is usury - in California, the penalty is: treble interest penalty; criminal misdemeanor possible. Always confirm the current rate with an attorney, as usury laws can change.
Do I need a notary for a promissory note in California?
Notarization is not required in California for a promissory note to be legally valid. Notarizing it anyway is strongly recommended - it deters forgery claims, simplifies court enforcement, and makes the note self-authenticating as evidence. Having 1 witness is also recommended.
What happens if a borrower defaults on a promissory note in California?
Upon default, the lender may demand immediate repayment of the full outstanding balance, charge any default interest rate specified in the note, and file suit in California court. Lenders have 4 years from the date of default to file a lawsuit under California's statute of limitations for written contracts.
How much notice must a lender give before demanding repayment in California?
A demand promissory note is due whenever the lender demands repayment - there is no fixed maturity date. The amount of notice required depends on what is written in the note itself; if no notice period is specified, repayment may be demanded immediately. Many demand notes include a minimum notice period (e.g., 30 days) as a courtesy term. In California, lenders have 4 years from when demand was first due to file suit.
What is the difference between a demand note and an installment note?
A demand promissory note has no fixed repayment schedule - the lender can call the loan at any time. An installment note has a set schedule of regular payments over a defined period. Demand notes are common for informal loans between family or friends, while installment notes are more common for larger, structured loans. Demand notes give lenders more flexibility but give borrowers less certainty.
What must be included in a California Demand Promissory Note?
A valid Demand Promissory Note in California must include: Written agreement signed by borrower; Demand notice period; Interest rate disclosure. Our platform automatically includes all required elements formatted to California standards.
What is California's usury limit for private promissory notes?
California's Constitution (Article XV) caps interest at 10% per year for non-exempt lenders making loans to individuals for personal, family, or household purposes. Loans for business, commercial, or investment purposes have a higher cap (the higher of 10% or 5% above the Federal Reserve discount rate). Banks, credit unions, licensed lenders, and seller-financed real estate transactions are exempt. Loans that violate California's usury law are void as to the interest portion.
