Pennsylvania 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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Pennsylvania rules that this document follows

Maximum interest (private loans)6% per year — 6% simple per year max on loans of $50,000 or less; loans over $50,000, business loans and loans to corporations are exempt (§ 301(f)); licensed consumer lenders follow the Consumer Discount Company ActSource: 41 P.S. § 201(a); § 301(f)
Criminal usury threshold36%Source: 18 P.S. § 4806.1–4806.3 (criminal usury: over 36% per year, felony)
Legal rate when none is stated6%Source: 41 P.S. § 202
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 note4 yearsSource: 42 Pa. C.S. § 5525(a)(7)
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 Pennsylvania

Keep the interest rate at or below the Pennsylvania 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 Pennsylvania?

6% per year for a private written loan (41 P.S. § 201(a); § 301(f)). 6% simple per year max on loans of $50,000 or less; loans over $50,000, business loans and loans to corporations are exempt (§ 301(f)); licensed consumer lenders follow the Consumer Discount Company Act Above 36% is criminal usury.

Does a promissory note need a notary or witnesses?

No. A note signed by the borrower is enforceable in Pennsylvania. 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 (42 Pa. C.S. § 5525(a)(7)).

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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.