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Texas Demand Promissory Note

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

Prepare a legally proper Demand Promissory Note for Texas that incorporates all required terms under Texas promissory note law. Fill in your loan details and download your completed, ready-to-sign Demand Promissory Note as a professional PDF.

Texas law governs promissory notes with specific usury limits and enforcement rules that protects both lending party and debtor. The usury limit in Texas is 10-18% depending on loan type. For a demand note in Texas, the 6-year limitation period runs from the date demand for payment is made. Texas law requires 3 specific elements in a valid promissory note.

Texas Promissory Note Requirements

Max Interest Rate 18%
Rate Details 10-18% depending on loan type
Usury Penalty Greater of three times the excess or up to $2,000 (Tex. Fin. Code 305.001); charging more than twice the authorized rate also forfeits the principal (305.002)
Statute of Limitations 6 years
Notarization Recommended
Witnesses Recommended (1)
Governing Agency Texas District Courts
Required Elements Written agreement signed by borrower; Demand notice period; Interest rate disclosure

Texas Demand 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.

Texas rules to know

  • Keep the interest rate at or below Texas's usury cap of 18% per year (10-18% depending on loan type).
  • Notarization is not required in Texas but is strongly recommended. A notarized note is self-authenticating in court and harder to dispute.
  • 1 witness is recommended in Texas even though not legally required.
  • In Texas, the lender has 6 years from the date demand is made to file suit to collect.

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).
  • A statement that repayment is due upon the lender's written demand.
  • Late fee amount and grace period, if any.
  • Signatures of both parties (and witnesses if required).
  • Minimum notice period before repayment must be made (e.g., 30 days), if the parties agreed to one.

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

What to Include in a Texas Demand Promissory Note

Every Demand Promissory Note in Texas should include the following critical provisions: the full legal names and addresses of both the lender and obligor, the principal loan amount, the interest rate (which must not exceed 10-18% depending on loan type under Texas law), the repayment schedule and due dates, any late payment penalties, the consequences of default, and the governing law clause. A demand note should clearly state that repayment is due upon the lender's written demand, with any minimum notice period the parties have agreed to before demand is made.

Texas requires the following elements in a valid promissory note: written agreement signed by borrower, demand notice period, interest rate disclosure.

How to Complete a Texas Demand Promissory Note

To complete a Demand Promissory Note in Texas, 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 10-18% depending on loan type in Texas), the repayment terms, and any collateral details if applicable.

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

Frequently Asked Questions

What is the maximum interest rate for a promissory note in Texas?
Texas caps interest at 10-18% depending on loan type. Charging above the legal limit is usury - in Texas, the penalty is: greater of three times the excess or up to $2,000 (tex. fin. code 305.001); charging more than twice the authorized rate also forfeits the principal (305.002). Always confirm the current rate with an attorney, as usury laws can change.
Do I need a notary for a promissory note in Texas?
Notarization is not required in Texas 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 Texas?
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 Texas court. For a demand note, the 6-year limitation period runs from the date demand for payment is made.
How much notice must a lender give before demanding repayment in Texas?
A demand promissory note is due whenever the lender demands repayment - there is no fixed maturity date. The amount of notice required depends on what is written in the note itself; if no notice period is specified, repayment may be demanded immediately. Many demand notes include a minimum notice period (e.g., 30 days) as a courtesy term. In Texas, lenders have 6 years from when demand was first due to file suit.
What is the difference between a demand note and an installment note?
A demand promissory note has no fixed repayment schedule - the lender can call the loan at any time. An installment note has a set schedule of regular payments over a defined period. Demand notes are common for informal loans between family or friends, while installment notes are more common for larger, structured loans. Demand notes give lenders more flexibility but give borrowers less certainty.
What must be included in a Texas Demand Promissory Note?
A valid Demand Promissory Note in Texas must include: Written agreement signed by borrower; Demand notice period; Interest rate disclosure. Our platform automatically includes all required elements formatted to Texas standards.
What is the usury limit for private loans in Texas?
Texas caps interest at 10% per year for private written contracts under the Texas Finance Code (§302.001), unless both parties agree to a higher rate in writing - in which case the maximum is 18% per year for most personal loans. Charging above the agreed limit or the statutory ceiling is usury. Texas has civil penalties for usury including forfeiture of all interest charged. Licensed lenders operate under separate rate schedules. Lenders have 4 years to sue on a written promissory note.

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