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Texas Unsecured Promissory Note

Create Texas Unsecured Promissory Note - $7.99

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

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

Texas law governs promissory notes with specific usury limits and enforcement rules that safeguards both lender and obligor. The usury limit in Texas is 10-18% depending on loan type. Lenders have 6 years to file suit to collect on a promissory note in Texas. 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; Clear repayment terms; Interest rate disclosure

Texas 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.

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 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 Texas may change; verify current rates before signing.

What to Include in a Texas Unsecured Promissory Note

Every Unsecured Promissory Note in Texas 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 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.

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

How to Complete a Texas Unsecured Promissory Note

To complete a Unsecured 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 Unsecured 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. Lenders have 6 years from the date of default to file a lawsuit under Texas's statute of limitations for written contracts.
Is an unsecured promissory note enforceable in Texas?
Yes. An unsecured promissory note is a legally enforceable contract in Texas even without collateral. If the borrower defaults, the lender can sue in Texas 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 Texas?
Yes. A properly executed promissory note is an enforceable contract in Texas. 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 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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