What Is an Ohio Promissory Note?
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 and lacks harsh penalties typical of loan agreements.
Laws: Promissory notes fall under the Ohio Revised Code Chapter 1343 – Interest.
Statute of Limitations: Six years (§1303.16).
Types of Ohio Promissory Notes: Secured vs. Unsecured
Ohio lenders need to consider how much security they want built into the loan. Choosing the right note helps protect your interests from the start.
Secured Ohio Promissory Note
Secures collateral upfront to protect the lender in case of borrower default.
Unsecured Ohio Promissory Note
Removes the requirement for borrowers to provide collateral to lenders.
Usury Laws and Interest Rates in Ohio
The promissory note must adhere to Ohio’s usury laws as outlined in Chapter 1343:
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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 the 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.
Sample Ohio Promissory Note
View a free example of an Ohio promissory note to see what it looks like. Write your own via our document editor and download your copy in PDF or Word format.
