Tennessee 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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Tennessee rules that this document follows

Maximum interest (private loans)10% per year — Max rate by written contract = 'applicable formula rate' = lesser of 24% or 4 points above the average prime loan rate (published monthly by the Dept. of Financial Institutions); 10% absent agreementSource: Tenn. Code § 47-14-103(2), (3); § 47-14-102(2)
Legal rate when none is stated10%Source: Tenn. Code § 47-14-103(3)
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 note6 yearsSource: Tenn. Code § 28-3-109(a)(3)
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 Tennessee

Keep the interest rate at or below the Tennessee 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 Tennessee?

10% per year for a private written loan (Tenn. Code § 47-14-103(2), (3); § 47-14-102(2)). Max rate by written contract = 'applicable formula rate' = lesser of 24% or 4 points above the average prime loan rate (published monthly by the Dept. of Financial Institutions); 10% absent agreement

Does a promissory note need a notary or witnesses?

No. A note signed by the borrower is enforceable in Tennessee. 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 (Tenn. Code § 28-3-109(a)(3)).

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