A Louisiana promissory note is a legal agreement that establishes a borrower’s promise to repay a loaned amount of money to a lender within a specified period of time.
The note outlines the terms and conditions of repayment, including the names of the parties involved, loan amount, whether installments are required, interest rate, and payment due date. Once signed, the note serves as a legal document that protects the lender against the borrower defaulting on their financial obligation.
In some cases, lenders may require collateral, which would be acquired by the lender as compensation for the loss of funds if the borrower cannot make timely payments.
Laws: Article 3 of the Louisiana UCC and the Louisiana Civil Code govern the creation and implementation of promissory notes.
Statute of Limitations: Ten years.
By Type
Usury Laws and Interest Rates
Promissory notes must comply with Louisiana’s usury laws, which you can find in RS 9:3500:
- In General (RS 9:3500(C)): 12%
- For Judicial Interest (RS 13:4202(B)): The judicial interest rate cannot exceed 3.25% above the federal discount rate.
- For Suit Against State or Political Subdivision (RS 13:5112(C)): The maximum interest rate on a claim for personal injury or wrongful death is 6%.
