A South Dakota promissory note is a legal document between a borrower and a lender, delineating the conditions under which the lender loans money and the borrower repays it. Both parties refer to this document for key details about the transaction, including the loan’s initiation date, the principal amount, the applicable interest rate, and the repayment plan.
This note may also specify consequences for late payments. Depending on the borrower’s credit history and the lender’s preferences, the borrower may need to have a co-signer add their signature to ensure repayment if the primary borrower doesn’t fulfill their obligations.
Laws: Chapter 57A-3 of the SD Codified Laws discusses the state’s laws relating to promissory notes.
Statute of Limitations: Six years (§ 57-3-118).
By Type
Usury Laws and Interest Rates
Promissory notes must comply with the usury laws in Chapter 54-3 (Interest and Usury):
- Without Contract (§ 54-3-4, § 54-3-16(3)): 12% per annum.
- With Contract (§ 54-3-1.1): No limit.
- For Inverse Condemnation Actions (§ 54-3-5.1, § 54-3-16(1)): 4.5%.
- For Support Debts or Judgments (§ 25-7A-14, § 54-3-16(4)): 1% per month or less.
- For Judgments and Statutory Liens (§ 54-3-5.1, § 54-3-16(2)): 10% per annum.
- For Past Due Money on Bills, Statements, and Invoices (§ 54-3-5): A maximum of 18% per year may appear on the invoice; otherwise, interest accrues at a rate of 15% per year.
- For Past Due Money in General (§ 54-3-5, § 54-3-16(6)): 15%.
