Iowa Unsecured Promissory Note

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Prepare a legally legally sound Unsecured Promissory Note for Iowa that features all required terms under Iowa promissory note law. Fill in your loan details and download your completed, ready-to-sign Unsecured Promissory Note as a professional PDF.

Iowa law governs promissory notes with specific usury limits and enforcement rules that safeguards both lender and obligor. The usury limit in Iowa is Floating cap published monthly by the Iowa Superintendent of Banking: 10-year Treasury average plus 2 points (6.25% for June 2026). Business and agricultural loans, and personal loans above the indexed threshold, may bear any agreed written rate. 5% legal rate absent a written contract.. Lenders have 6 years to file suit to collect on a promissory note in Iowa. Iowa law requires 3 specific elements in a valid promissory note.

Iowa Promissory Note Requirements

Max Interest Rate 6.25%

Rate Details Floating cap published monthly by the Iowa Superintendent of Banking: 10-year Treasury average plus 2 points (6.25% for June 2026). Business and agricultural loans, and personal loans above the indexed threshold, may bear any agreed written rate. 5% legal rate absent a written contract.

Usury Penalty Judgment is limited to the principal (all interest forfeited) plus a forfeiture of 8% per year of the unpaid principal payable to the state (Iowa Code 535.5)

Statute of Limitations 6 years

Notarization Recommended

Witnesses Recommended (1)

Governing Agency Iowa District Courts

Required Elements Written agreement signed by borrower; Clear repayment terms; Interest rate disclosure

Iowa Unsecured 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.

Iowa rules to know

Keep the interest rate at or below Iowa's usury cap of 6.25% per year (Floating cap published monthly by the Iowa Superintendent of Banking: 10-year Treasury average plus 2 points (6.25% for June 2026). Business and agricultural loans, and personal loans above the indexed threshold, may bear any agreed written rate. 5% legal rate absent a written contract.).
Notarization is not required in Iowa but is strongly recommended. A notarized note is self-authenticating in court and harder to dispute.
1 witness is recommended in Iowa even though not legally required.
In Iowa, 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).
Late fee amount and grace period, if any.
Signatures of both parties (and witnesses if required).
A clear statement that no collateral secures this note and the lender relies solely on the borrower's promise to repay.

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

What to Include in a Iowa Unsecured Promissory Note

Every Unsecured Promissory Note in Iowa should include the following important provisions: the full legal names and addresses of both the lending party and debtor, the principal loan amount, the interest rate (which must not exceed Floating cap published monthly by the Iowa Superintendent of Banking: 10-year Treasury average plus 2 points (6.25% for June 2026). Business and agricultural loans, and personal loans above the indexed threshold, may bear any agreed written rate. 5% legal rate absent a written contract. under Iowa law), the repayment schedule and due dates, any late payment penalties, the consequences of default, and the governing law clause.

Iowa requires the following elements in a valid promissory note: written agreement signed by borrower, clear repayment terms, interest rate disclosure.

How to Complete a Iowa Unsecured Promissory Note

To complete a Unsecured Promissory Note in Iowa, 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 Floating cap published monthly by the Iowa Superintendent of Banking: 10-year Treasury average plus 2 points (6.25% for June 2026). Business and agricultural loans, and personal loans above the indexed threshold, may bear any agreed written rate. 5% legal rate absent a written contract. in Iowa), the repayment terms, and any collateral details if applicable.

Our platform walks you through each section with a guided form tailored to Iowa requirements. Once you have filled in all details, you can preview the document, choose from five professional document styles, and download your completed Unsecured Promissory Note as a PDF.

Frequently Asked Questions

What is the maximum interest rate for a promissory note in Iowa?

Iowa caps interest at Floating cap published monthly by the Iowa Superintendent of Banking: 10-year Treasury average plus 2 points (6.25% for June 2026). Business and agricultural loans, and personal loans above the indexed threshold, may bear any agreed written rate. 5% legal rate absent a written contract.. Charging above the legal limit is usury - in Iowa, the penalty is: judgment is limited to the principal (all interest forfeited) plus a forfeiture of 8% per year of the unpaid principal payable to the state (iowa code 535.5). Always confirm the current rate with an attorney, as usury laws can change.

Do I need a notary for a promissory note in Iowa?

Notarization is not required in Iowa 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 Iowa?

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 Iowa court. Lenders have 6 years from the date of default to file a lawsuit under Iowa's statute of limitations for written contracts.

Is an unsecured promissory note enforceable in Iowa?

Yes. An unsecured promissory note is a legally enforceable contract in Iowa even without collateral. If the borrower defaults, the lender can sue in Iowa court and obtain a judgment, which can be used to garnish wages or bank accounts. Lenders have 6 years to file suit.

Is a promissory note the same as an IOU?

No. An IOU is an informal acknowledgment of a debt - it typically lacks repayment terms, interest rates, and default provisions. A promissory note is a formal legal contract with specific terms including the loan amount, interest rate, repayment schedule, and consequences of default. Promissory notes are far more enforceable in court than informal IOUs.

Is a promissory note legally binding in Iowa?

Yes. A properly executed promissory note is an enforceable contract in Iowa. It must identify both parties, state the loan amount and repayment terms, and be signed by the borrower. Lenders have 6 years to pursue legal action to collect on a defaulted note.

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