A Maine promissory note is a legal document that represents a promise from a borrower to repay a lender a certain amount of money, along with interest, by a specified date. This type of note is commonly used in short-term financing, such as student and vehicle loans and real estate transactions.
It outlines the principal amount, deadlines, interest rate, and repercussions for late payments and is a legally binding agreement that holds the borrower responsible for repayment. Failure to repay the loan can result in legal action from the lender, who may also be entitled to seize any assets used as collateral for the loan.
Laws: The Maine Revised Statutes Uniform Commercial Code Article 9-A; Transactions governs the creation and implementation of promissory notes.
Statute of Limitations: Six years. (§ 3-1118)
By Type
Usury Laws and Interest Rates
Promissory notes must comply with Maine’s usury laws, which you can find in Title 9-B § 432 & Title 9-A, Art. 2 of the Maine Revised Statutes:
- With a Contract (§ 432(1)): No stated maximum.
- With no Contract (§ 432(1)): 6% per year
- For Consumer Loans (§ 2-401(2)): The maximum amount that can be charged as a finance fee on a consumer loan is limited to the following:
- 30% on the unpaid balance for loans $2,000 or less.
- 24% on the outstanding balance for loans over $2,000 but less than $4,000.
- 18% on the due balance for loans more than $4,000.
- 18% on the entire loan amount for loans more than $8,000.
- For Pawnbrokers (§ 3963(1)): 25% per month for loans $500 or less; 20% for loans over $500.
- For Prejudgment Interest (§ 1602-B): The interest rate will be the one-year United States Treasury bill rate plus 3% unless a contract or note establishes a different rate.
- For Post-Judgment Interest (§ 1602-C): The interest rate cannot exceed the greater of the following:
- The one-year United States Treasury bill rate + 6%; or
- The rate established in any contract or note or the one-year United States Treasury bill rate + 6%, whichever is greater.
*The interest rates applicable to consumer loans do not cover the following transactions:
