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.
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%.
- Without a Contract (§ 31:1-1(a)): 6%
- 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%.
