Indiana Promissory Note
Generate a promissory note tailored to Indiana law. Our AI incorporates IN-specific statutory requirements, disclosure obligations, and legal standards into every document.
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Indiana Legal Requirements
Key IN statutes and obligations that apply to your promissory note.
Requirements
- Indiana Uniform Commercial Code (IC Title 26, Art. 3) governs negotiable instruments
- Note must be in writing, signed by maker, contain unconditional promise to pay sum certain
- Indiana consumer loan maximum rate: 25% APR for unlicensed lenders (IC §24-4.5-3-508)
- Commercial notes: no usury cap between businesses
- UCC-1 financing statement required to perfect security interest in personal property
Restrictions & Limits
- Consumer credit transactions governed by Indiana Uniform Consumer Credit Code (IC §24-4.5)
- Payday loan interest rates capped at $15 per $100 for loans up to $550
- Confession of judgment clauses may be void in Indiana consumer transactions
- Prepayment penalty must be expressly stated in the note; presumed waived if not mentioned
- Notes that violate consumer protection laws may be void or voidable
Official Statute References
Primary Indiana statutes governing this document type.
Indiana Promissory Note FAQ
Common questions about promissory notes under Indiana law.
What is Indiana's interest rate cap on loans?
For consumer credit transactions, Indiana's Uniform Consumer Credit Code (IC §24-4.5) caps interest rates: 36% APR for loans under $2,000, 21% for loans $2,000–$4,000, and 15% for loans over $4,000. Commercial loans between businesses have no usury cap. Always classify the loan purpose (consumer vs. commercial) before setting the rate.
How do I create a secured promissory note in Indiana?
For personal property collateral, file a UCC-1 Financing Statement with the Indiana Secretary of State (online, $20 fee). For real property, record a mortgage with the county recorder where the property is located. Perfect the interest promptly to establish priority. In a bankruptcy, unperfected security interests are often avoided by the trustee.
What happens if an Indiana borrower defaults?
The lender may accelerate the full balance (if the note includes an acceleration clause), file suit in Indiana courts, and enforce against collateral. Small claims court handles disputes up to $10,000 (circuit/superior court for larger amounts). For secured notes, the lender may repossess personal property collateral without court order if done peacefully (UCC §9-609).
Can I include a prepayment penalty in an Indiana promissory note?
Yes for commercial notes; consumer notes have restrictions. For consumer credit transactions, Indiana's UCCC limits prepayment penalties. For commercial notes, prepayment penalties are fully enforceable if clearly stated. Specify the penalty as a fixed amount or formula (e.g., 2% of remaining principal). Courts construe ambiguous penalty clauses against the lender.
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Promissory Note by State
Laws vary significantly by state. Find the right form for your location.
Disclaimer: LegalLawDocs.com provides self-help legal documents for informational purposes only. The documents and information on this site do not constitute legal advice and are not a substitute for consultation with a licensed attorney. Laws vary by state and change frequently — review your document with a qualified professional before relying on it.