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California Secured Promissory Note

Create California Secured Promissory Note - $7.99

Not a blank template - your details are filled in, formatted to California law, and ready to sign.

Build a legally valid Secured Promissory Note for California that contains all required terms under California promissory note law. Fill in your loan details and download your completed, ready-to-sign Secured Promissory Note as a professional PDF.

California law governs promissory notes with specific usury limits and enforcement rules that defends both lending party and debtor. The usury limit in California is 10% for personal loans by written contract. Lenders have 6 years to file suit to collect on a promissory note in California. California law requires 4 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 6 years
Notarization Recommended
Witnesses Recommended (1)
Governing Agency California Superior Courts
Required Elements Written agreement signed by borrower; Detailed collateral description; Interest rate disclosure; Lien filing if applicable

California Secured Promissory Note Signing Checklist

Print this or save it as a PDF and use it at the signing. Review every item before any party puts pen to paper.

Before you sign

  • Both the lender and borrower read the full note before signing.
  • Confirm the principal amount, interest rate, and repayment terms match what was agreed.
  • Confirm any late fee amount and grace period are correct.
  • The lender keeps the original signed note in a safe place.
  • Each party keeps a signed copy for their own records.

California rules to know

  • Keep the interest rate at or below California's usury cap of 10% per year (10% for personal loans by written contract).
  • Notarization is not required in California but is strongly recommended. A notarized note is self-authenticating in court and harder to dispute.
  • 1 witness is recommended in California even though not legally required.
  • In California, the lender has 6 years from the date of default to file suit to collect on the note.

In the note itself

  • Borrower's full legal name and current address.
  • Lender's full legal name and current address.
  • Principal loan amount written out in both numbers and words.
  • Annual interest rate (expressed as a percentage).
  • Maturity date (the date by which the full balance must be repaid).
  • Detailed description of the collateral (make, model, serial number, or legal description for real estate).
  • Late fee amount and grace period, if any.
  • Signatures of both parties (and witnesses if required).
  • Lender's right to seize and sell the collateral upon default.

This checklist is a reference aid only. Consult an attorney for advice specific to your situation. Usury and enforcement rules for California may change; verify current rates before signing.

What to Include in a California Secured Promissory Note

Every Secured Promissory Note in California should include the following essential provisions: the full legal names and addresses of both the lender and obligor, 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. Because this is a secured promissory note, you must also describe the collateral in detail, including how it will be valued and the lender's right to seize it upon default.

California requires the following elements in a valid promissory note: written agreement signed by borrower, detailed collateral description, interest rate disclosure, lien filing if applicable.

How to Complete a California Secured Promissory Note

To complete a Secured 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 Secured 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. As a secured note, the lender may also seize and sell the collateral to recover the outstanding amount. Lenders have 6 years from the date of default to file a lawsuit under California's statute of limitations for written contracts.
What collateral can be used for a secured promissory note in California?
Common collateral for secured promissory notes includes real estate, vehicles, equipment, bank accounts, or valuable personal property. The collateral must be described in detail in the note - make, model, serial number, or legal property description depending on the asset type. The lender's right to seize and sell the collateral upon default must also be clearly stated. For real estate collateral, a separate deed of trust or mortgage is typically also required.
What is the difference between a secured and unsecured promissory note?
A secured promissory note is backed by collateral - if the borrower defaults, the lender can seize the collateral to recover the debt. An unsecured note relies solely on the borrower's promise to repay; the lender must sue and obtain a judgment to collect. Secured notes carry less risk for the lender and typically carry lower interest rates as a result.
What must be included in a California Secured Promissory Note?
A valid Secured Promissory Note in California must include: Written agreement signed by borrower; Detailed collateral description; Interest rate disclosure; Lien filing if applicable. 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.

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