An Arkansas promissory note represents a written commitment from the borrower to repay the lender a specified sum, including any accrued interest. It outlines the terms and conditions of a loan agreement, such as the deadline by which the loan must be fully repaid and any penalties applicable for late payments or defaults.
In the case of secured loans, the document may specify the collateral provided by the borrower to secure the loan. While notarization is not mandated by state law, it can serve as valuable evidence of the document’s authenticity and may strengthen legal standing in case of disputes.
Laws: The applicability of relevant laws varies depending on the purpose for which the documents are issued. For instance, promissory notes falling under business or commercial law are governed by Arkansas Code Title 4, whereas those associated with higher education are regulated by Title 6.
Statute of Limitations: Five years.
Usury Laws and Interest Rates
The promissory note must adhere to the state’s usury laws, as stipulated in Title 4, Subtitle 5, Chapter 57.
- With a Contract (§ 4-57-104): Amendment 89 of the Arkansas Constitution establishes the maximum interest rate at 17%.
- Without a Contract (§ 4-57-101(d)): 6%.
- For Judgments (§ 16-65-114(a)(2)): 17% (under Arkansas Constitution, Amendment 89).
- For Policy (Life Insurance) Loan (§ 23-81-109(c)(1)): 8% or an adjustable maximum interest rate (subject to usury limitations).
