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Kentucky Unsecured Promissory Note

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

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

Kentucky law governs promissory notes with specific usury limits and enforcement rules that defends both note holder and borrower. The usury limit in Kentucky is 19% or 4% above Federal Reserve rate. Lenders have 6 years to file suit to collect on a promissory note in Kentucky. Kentucky law requires 3 specific elements in a valid promissory note.

Kentucky Promissory Note Requirements

Max Interest Rate 19%
Rate Details 19% or 4% above Federal Reserve rate
Usury Penalty Knowing usury forfeits the entire interest; twice the interest paid may be recovered within two years (KRS 360.020)
Statute of Limitations 6 years
Notarization Recommended
Witnesses Recommended (1)
Governing Agency Kentucky Circuit Courts
Required Elements Written agreement signed by borrower; Clear repayment terms; Interest rate disclosure

Kentucky 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.

Kentucky rules to know

  • Keep the interest rate at or below Kentucky's usury cap of 19% per year (19% or 4% above Federal Reserve rate).
  • Notarization is not required in Kentucky but is strongly recommended. A notarized note is self-authenticating in court and harder to dispute.
  • 1 witness is recommended in Kentucky even though not legally required.
  • In Kentucky, 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 Kentucky may change; verify current rates before signing.

What to Include in a Kentucky Unsecured Promissory Note

Every Unsecured Promissory Note in Kentucky should include the following essential 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 19% or 4% above Federal Reserve rate under Kentucky law), the repayment schedule and due dates, any late payment penalties, the consequences of default, and the governing law clause.

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

How to Complete a Kentucky Unsecured Promissory Note

To complete a Unsecured Promissory Note in Kentucky, 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 19% or 4% above Federal Reserve rate in Kentucky), the repayment terms, and any collateral details if applicable.

Our platform walks you through each section with a guided form tailored to Kentucky 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 Kentucky?
Kentucky caps interest at 19% or 4% above Federal Reserve rate. Charging above the legal limit is usury - in Kentucky, the penalty is: knowing usury forfeits the entire interest; twice the interest paid may be recovered within two years (krs 360.020). Always confirm the current rate with an attorney, as usury laws can change.
Do I need a notary for a promissory note in Kentucky?
Notarization is not required in Kentucky 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 Kentucky?
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 Kentucky court. Lenders have 6 years from the date of default to file a lawsuit under Kentucky's statute of limitations for written contracts.
Is an unsecured promissory note enforceable in Kentucky?
Yes. An unsecured promissory note is a legally enforceable contract in Kentucky even without collateral. If the borrower defaults, the lender can sue in Kentucky 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 Kentucky?
Yes. A properly executed promissory note is an enforceable contract in Kentucky. 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.
What is Kentucky's usury limit for private promissory notes?
Kentucky caps interest at 8% per year as the legal rate for contracts that don't specify a rate (KRS §360.010). Parties may agree in writing to rates up to 19% per year for most personal loans. Charging above 19% is usurious and may void the excess interest. For commercial loans between businesses, Kentucky courts apply more flexibility. For a negotiable promissory note, the Uniform Commercial Code gives lenders six years to sue to collect (KRS 355.3-118).

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