A New Jersey promissory note is a legal agreement that outlines the repayment terms of a loan between a borrower and lender, detailing the amount, repayment schedule, and consequences of default or late payments.
To minimize risk, lenders may secure the loan with the borrower’s collateral or insist on a co-signer, providing a safeguard through possible collateral seizure or legal action against non-compliant borrowers. This document highlights the borrower’s obligation and the protective measures for lenders.
Laws: Promissory notes fall under New Jersey Statutes, Title 31.
Statute of Limitations: Six years (§2A:14-1).
By Type
Usury Laws and Interest Rates
The promissory note must adhere to New Jersey’s usury laws as outlined in Title 31:
- With a Contract (§ 31:1-1(a)): 16% per annum.
- Without a Contract (§ 31:1-1(a)): 6% per annum.
- For Judgments ≤$15,000 (Rule 4:42-11(a)(ii)): Rate equals New Jersey Cash Management Fund‘s previous year’s average return.
- For Judgments >$15,000 (Rule 4:42-11(a)(iii)): Rate equals Fund’s average return from the previous year + 2%.
