A New Mexico promissory note is a concise, legally binding agreement between lender and borrower, outlining repayment terms, interest rate, and loan maturity date without requiring government filing.
Simplified compared to formal loan agreements, it is typically used among individuals and entities, offering two specific versions for New Mexico. This document ensures enforceability and serves as court evidence if the borrower defaults.
Laws: Promissory notes fall under Chapter 56, Article 8.
Statute of Limitations: Six years (§37-1-3).
Types of New Mexico Promissory Notes
New Mexico lenders should weigh the need for legal protection against simplicity. The type of promissory note you choose can directly influence how secure and enforceable your loan is.
Secured
Secures the lender's interests by pre-agreeing on collateral items in the event of borrower default before signing the agreement.
Unsecured
Does not necessitate the borrower providing collateral to the lender.
Usury Laws and Interest Rates
The promissory note must adhere to New Mexico’s usury laws as outlined in Chapter 56, Article 8:
- With a Contract: No specified Limit.
- Without a Contract (§ 56-8-3): 15%
- For Loans to Corporations/Businesses (§ 56-8-9(B)): No cap, except on farm/agriculture mortgages (§ 56-8-10).
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For Judgments: 8.75% (§ 56-8-4); exceptions include:
- Different rates on written instruments.
- 15% per annum for judgments from tortious acts or bad faith.
- 10% per annum in claims involving tortious acts or bad faith if the trial is delayed by the plaintiff.
- 10% per annum in claims involving tortious acts or bad faith if the defendant offered a reasonable settlement.
- For Open Account (§ 56-8-5): 15%, can be higher if agreed.
- For Child Support Cases: 4% (§40-4-7.3).
Sample New Mexico Promissory Note
View a free example of a New Mexico promissory note to see what it looks like. When you’re ready, complete your own using our document editor. Available to download in PDF and Word formats.
