An Ohio promissory note is a legally binding written agreement where a borrower commits to repaying a specified loan amount to the lender by a set date, including interest and potential late fees. It outlines repayment terms, interest rates, and collateral requirements.
Once signed by all parties, it becomes enforceable in court. This document is commonly used among familiar parties, lacking harsh penalties typical of loan agreements.
By Type
Usury Laws and Interest Rates
The promissory note must adhere to Ohio’s usury laws as outlined in Chapter 1343:
- With Contract (§ 1343.01): 8%. Higher rates are allowed if:
- Principal over $100,000.
- Payment to a “Securities Exchange Act of 1934” registered entity.
- Secured by deed of trust or mortgage.
- Single installment loan, not secured by household furnishings.
- Business loan to an entity.
- Secured by borrower’s salary/wages.
- Without Contract (§ 1343.03(A) & § 5703.47(B)): Federal short-term rate + 3%.
- For Monetary Judgments (§ 1343.02): As specified in the contract.
- Under Ohio law (§ 1303.16(a)), lenders have six years to pursue legal action if the borrower defaults.
