Michigan 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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Michigan rules that this document follows
| Maximum interest (private loans) | 7% per year — 7% per year max by written contract; loans to business entities exempt (§ 438.61); criminal threshold 25%Source: Mich. Comp. Laws § 438.31; § 438.61 |
|---|---|
| Criminal usury threshold | 25%Source: Mich. Comp. Laws § 438.41 (criminal usury: over 25% per year, felony up to 5 years) |
| Legal rate when none is stated | 5%Source: Mich. Comp. Laws § 438.31 |
| Late fees | No 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 note | 6 yearsSource: Mich. Comp. Laws § 600.5807(9) |
| Notarization / witnesses | Not 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 Michigan
Keep the interest rate at or below the Michigan 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 Michigan?
7% per year for a private written loan (Mich. Comp. Laws § 438.31; § 438.61). 7% per year max by written contract; loans to business entities exempt (§ 438.61); criminal threshold 25% Above 25% is criminal usury.
Does a promissory note need a notary or witnesses?
No. A note signed by the borrower is enforceable in Michigan. 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?
6 years from default (Mich. Comp. Laws § 600.5807(9)).
Related documents
- Independent Contractor Agreement — Michigan
- Non-Disclosure Agreement (NDA) — Michigan
- LLC Operating Agreement — Michigan
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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.
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