A North Carolina promissory note is a flexible, binding document outlining loan repayment terms between a lender and borrower, including due date, interest rate, installment schedule, and collateral. It is more detailed than an IOU but simpler than a standard loan agreement.
Laws: Promissory notes fall under the North Carolina General Statutes Chapter 24 – Uniform Commercial Code.
Statute of Limitations: Six years (NC. Gen. Stat. §25-3-118).
By Type
Usury Laws and Interest Rates
The promissory note must adhere to North Carolina’s usury laws as outlined in Chapter 24:
- With contract (NC Gen. Stat. § 24-1.1(a)): Loans under $25,000: Interest rate set monthly by the North Carolina Association of Banks on the 15th (consistently 16% since 1984). Loans over $25,000: No interest rate limit.
- Without contract (NC Gen. Stat. § 24-1): 8%.
- For Monetary Judgments (NC Gen. Stat. § 24-5(a)): The contract rate applies, or 8% per annum, on the unpaid balance, if no rate is specified.
- In case of default, the borrower might have to pay legal fees, capped at 15% of the loan balance at the time of default by NC Gen. Stat. § 6-21.2(1).
