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Create a legally legally sound Secured Promissory Note for Pennsylvania that includes all required terms under Pennsylvania promissory note law. Fill in your loan details and download your completed, ready-to-sign Secured Promissory Note as a professional PDF.
Pennsylvania law governs promissory notes with specific usury limits and enforcement rules that secures both lender and obligor. The usury limit in Pennsylvania is 6% maximum for loans under $50,000. Lenders have 4 years to file suit to collect on a promissory note in Pennsylvania. Pennsylvania law requires 4 specific elements in a valid promissory note.
Pennsylvania Promissory Note Requirements
Max Interest Rate6%
Rate Details6% maximum for loans under $50,000
Usury PenaltyTreble excess interest penalty
Statute of Limitations4 years
NotarizationRecommended
WitnessesRecommended (1)
Governing AgencyPennsylvania Courts of Common Pleas
Required Elements Written agreement signed by borrower; Detailed collateral description; Interest rate disclosure; Lien filing if applicable
What to Include in a Pennsylvania Secured Promissory Note
Every Secured Promissory Note in Pennsylvania should include the following critical provisions: the full legal names and addresses of both the creditor and borrowing party, the principal loan amount, the interest rate (which must not exceed 6% maximum for loans under $50,000 under Pennsylvania 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.
Pennsylvania requires the following elements in a valid promissory note: written agreement signed by borrower, detailed collateral description, interest rate disclosure, lien filing if applicable. Lowest cap in nation for small loans.
How to Complete a Pennsylvania Secured Promissory Note
To complete a Secured Promissory Note in Pennsylvania, 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 6% maximum for loans under $50,000 in Pennsylvania), the repayment terms, and any collateral details if applicable.
Our platform walks you through each section with a guided form tailored to Pennsylvania 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 Pennsylvania?
Pennsylvania caps interest at 6% maximum for loans under $50,000. Charging above the legal limit is usury - in Pennsylvania, the penalty is: treble excess interest penalty. Always confirm the current rate with an attorney, as usury laws can change.
Do I need a notary for a promissory note in Pennsylvania?
Notarization is not required in Pennsylvania 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 Pennsylvania?
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 Pennsylvania court. As a secured note, the lender may also seize and sell the collateral to recover the outstanding amount. Lenders have 4 years from the date of default to file a lawsuit under Pennsylvania's statute of limitations for written contracts.
What collateral can be used for a secured promissory note in Pennsylvania?
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 Pennsylvania Secured Promissory Note?
A valid Secured Promissory Note in Pennsylvania 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 Pennsylvania standards.
What is Pennsylvania's usury limit for private loans?
Pennsylvania's Loan Interest and Protection Law (Act 6) limits consumer loan interest to 6% per year for loans under $50,000 unless made by a licensed lender - though many consumer transactions are exempt by other statutes. For non-consumer business loans between private parties, Pennsylvania courts apply a reasonableness standard. Pennsylvania's 4-year statute of limitations applies to written promissory notes (6 years if under seal). Licensed lenders may charge higher rates under separate licensing laws.
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