Draft a legally legally sound Unsecured Promissory Note for Tennessee that includes all required terms under Tennessee promissory note law. Fill in your loan details and download your completed, ready-to-sign Unsecured Promissory Note as a professional PDF.
Tennessee law governs promissory notes with specific usury limits and enforcement rules that secures both note holder and borrower. The usury limit in Tennessee is 10% or 4% above prime rate. Lenders have 6 years to file suit to collect on a promissory note in Tennessee. Tennessee law requires 3 specific elements in a valid promissory note.
Tennessee Promissory Note Requirements
Max Interest Rate 10%
Rate Details 10% or 4% above prime rate
Usury Penalty Forfeiture of all interest; triple penalty if willful
Statute of Limitations 6 years
Notarization Recommended
Witnesses Recommended (1)
Governing Agency Tennessee Circuit Courts
Required Elements Written agreement signed by borrower; Clear repayment terms; Interest rate disclosure
What to Include in a Tennessee Unsecured Promissory Note
Every Unsecured Promissory Note in Tennessee should include the following critical 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 10% or 4% above prime rate under Tennessee law), the repayment schedule and due dates, any late payment penalties, the consequences of default, and the governing law clause.
Tennessee requires the following elements in a valid promissory note: written agreement signed by borrower, clear repayment terms, interest rate disclosure.
How to Complete a Tennessee Unsecured Promissory Note
To complete a Unsecured Promissory Note in Tennessee, 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% or 4% above prime rate in Tennessee), the repayment terms, and any collateral details if applicable.
Our platform walks you through each section with a guided form tailored to Tennessee 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 Tennessee?
Tennessee caps interest at 10% or 4% above prime rate. Charging above the legal limit is usury - in Tennessee, the penalty is: forfeiture of all interest; triple penalty if willful. Always confirm the current rate with an attorney, as usury laws can change.
Do I need a notary for a promissory note in Tennessee?
Notarization is not required in Tennessee 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 Tennessee?
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 Tennessee court. Lenders have 6 years from the date of default to file a lawsuit under Tennessee's statute of limitations for written contracts.
Is an unsecured promissory note enforceable in Tennessee?
Yes. An unsecured promissory note is a legally enforceable contract in Tennessee even without collateral. If the borrower defaults, the lender can sue in Tennessee 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 Tennessee?
Yes. A properly executed promissory note is an enforceable contract in Tennessee. 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 usury limits apply to private promissory notes in Tennessee?
Tennessee caps interest at 10% per year as a default, but parties may agree in writing to any rate up to 24% per year for most loans (T.C.A. §47-14-103). Rates above 24% are subject to Tennessee's usury penalty - forfeiture of all interest and a fine equal to twice the interest charged. Tennessee's 6-year statute of limitations applies to written contracts. Business loans between sophisticated parties may have more flexibility under Tennessee's commercial lending statutes.
