California Promissory Note

A secured or unsecured loan note with installment or lump-sum repayment, interest within your state's legal limit, late fees and default terms.

Free to fill & preview · $19 for the clean PDF + Word

This preview updates as you type. Blank fields show as ____ .

California rules that this document follows

Maximum interest (private loans)10% per year — Loans primarily for personal, family or household purposes: 10% per year; other loans: greater of 10% or 5 points above the Federal Reserve Bank of San Francisco discount rate; many lender exemptions (banks, licensed lenders, real-estate-broker-arranged loans)Source: Cal. Const. art. XV, § 1
Legal rate when none is stated7%Source: Cal. Const. art. XV, § 1 (7% absent agreement); Cal. Code Civ. Proc. § 685.010 (10% on judgments)
Late feesLate charge must be a reasonable pre-estimate of damages (Cal. Civ. Code § 1671); consumer loan late fees are limited by Fin. Code § 22320.5 for licensed lenders
Time to sue on a written note4 yearsSource: Cal. Code Civ. Proc. § 337 (written contracts, 4 years); Cal. Com. Code § 3118 (negotiable notes, 6 years)
Notarization / witnessesNot required (optional for evidentiary value)

Rules current as of 2026-09-07. Statutes change; verify before relying on them.

How to use this Promissory Note in California

Keep the interest rate at or below the California ceiling shown above; a usurious note can cost the lender all interest and more. For loans between family members, the IRS applicable federal rate (AFR) is the minimum to avoid imputed-gift issues on loans above $10,000.

Sign one original; the lender keeps it and the borrower keeps a copy. When the note is paid, the lender should mark it 'PAID IN FULL' and return it.

Frequently asked questions

What is the maximum interest rate I can charge in California?

10% per year for a private written loan (Cal. Const. art. XV, § 1). Loans primarily for personal, family or household purposes: 10% per year; other loans: greater of 10% or 5 points above the Federal Reserve Bank of San Francisco discount rate; many lender exemptions (banks, licensed lenders, real-estate-broker-arranged loans)

Does a promissory note need a notary or witnesses?

No. A note signed by the borrower is enforceable in California. Notarizing is optional; for a secured loan, file a UCC-1 or note the lien on the vehicle title to protect the lender.

How long can the lender sue on an unpaid note?

4 years from default (Cal. Code Civ. Proc. § 337 (written contracts, 4 years); Cal. Com. Code § 3118 (negotiable notes, 6 years)).

Related documents

Other states

FormsByState provides self-help document templates and general information, not legal advice. We are not a law firm. For advice about your situation consult a licensed attorney in your state.