Maryland 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.

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Maryland rules that this document follows

Maximum interest (private loans)8% per year — 8% simple per year by written agreement; up to 24% for unsecured loans or loans secured by property other than the borrower's residence (§ 12-103(a)(3), (e)); loans over $50,000 and business loans exemptSource: Md. Code, Com. Law § 12-102; § 12-103
Legal rate when none is stated6%Source: Md. Code, Com. Law § 12-102; Md. Const. art. III, § 57
Late feesNo statutory cap on late fees for private (non-consumer-lender) loans; fee must be a reasonable liquidated-damages estimate and, together with interest, must not push the effective rate above the usury ceiling
Time to sue on a written note3 yearsSource: Md. Code, Cts. & Jud. Proc. § 5-101 (3 years); § 5-102 (contracts under seal, 12 years); Com. Law § 3-118 (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 Maryland

Keep the interest rate at or below the Maryland 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 Maryland?

8% per year for a private written loan (Md. Code, Com. Law § 12-102; § 12-103). 8% simple per year by written agreement; up to 24% for unsecured loans or loans secured by property other than the borrower's residence (§ 12-103(a)(3), (e)); loans over $50,000 and business loans exempt

Does a promissory note need a notary or witnesses?

No. A note signed by the borrower is enforceable in Maryland. 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?

3 years from default (Md. Code, Cts. & Jud. Proc. § 5-101 (3 years); § 5-102 (contracts under seal, 12 years); Com. Law § 3-118 (notes, 6 years)).

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