Alaska Loan Agreement
An Alaska loan agreement sets the loan terms and caps a private loan at the greater of 10 percent or 5 points above the Federal Reserve rate, with big loans exempt.
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Introduction
In Alaska, a loan agreement is a written contract to lend money and be repaid with interest, and that interest generally cannot exceed the greater of 10 percent per year or 5 percentage points above the 12th Federal Reserve District rate. In Alaska the interest you can charge is capped for most private loans. Under Alaska Statutes Section 45.45.010, the parties may not agree to a rate higher than the greater of 10 percent per year or 5 percentage points above the rate charged member banks by the 12th Federal Reserve District, but a loan whose principal exceeds 25,000 dollars is exempt from that limit. If a written agreement does not state a rate, the legal rate on money after it is due is 10.5 percent per year. Making an occasional private loan does not require a license: an Alaska Small Loans Act license is needed only by a person engaged in the business of making loans of 25,000 dollars or less at a higher rate (Alaska Statutes Section 06.20.010), which the Division of Banking and Securities regulates. Once the rate is set, a sound Alaska loan agreement names the parties, the principal, the interest rate as a number, the repayment schedule, any late fee, and what counts as default. It should include an acceleration clause, which lets the lender demand the entire unpaid balance at once if the borrower misses payments. Put the terms in writing: a lawsuit on a contract must be filed within three years (Alaska Statutes Section 09.10.053), and a clear signed agreement is what protects both sides if the loan is later disputed. DocDraft builds your Alaska loan agreement from your facts, with attorney review available before you sign.
Key Things to Know
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A loan agreement records an Alaska lender's money and the borrower's promise to repay it, with the amount, the rate, and the due dates set down in writing; a loan whose principal is more than 25,000 dollars is exempt from the state interest ceiling.
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Alaska caps the contract rate on most private loans. Under Alaska Statutes Section 45.45.010 the parties may not agree to more than the greater of 10 percent per year or 5 percentage points above the rate charged member banks by the 12th Federal Reserve District. Banks and licensed lenders follow their own statutes.
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A loan whose principal exceeds 25,000 dollars is exempt from the rate cap. Alaska Statutes Section 45.45.010 lifts the interest limit once the principal is more than 25,000 dollars, so a large private loan may set a higher agreed rate in writing.
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If a written loan agreement does not state a rate, the legal rate on money after it is due is 10.5 percent per year (Alaska Statutes Section 45.45.010). Always write the agreed rate into the agreement so this default rate does not apply by accident.
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You do not need a license to make an occasional private loan. An Alaska Small Loans Act license is required only of a person engaged in the business of making loans of 25,000 dollars or less at a higher rate (Alaska Statutes Section 06.20.010), regulated by the Division of Banking and Securities.
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Put the loan in writing and keep a late fee reasonable. A written, signed agreement is far easier to enforce, and any late charge should be a reasonable estimate of the lender's actual costs from a late payment rather than an arbitrary penalty.
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Spell out default and acceleration, and mind the deadline to sue. Define what counts as default, include an acceleration clause so the lender can demand the whole unpaid balance at once, and remember a lawsuit on a contract must be filed within three years (Alaska Statutes Section 09.10.053).
Key decisions before you file
Before you file a Loan Agreement in Alaska, a few decisions shape the document: which option to choose and what each one means. The Loan Agreement guide walks through them.
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Alaska Requirements for Loan Agreement
Alaska caps the contract rate on a private loan of 25,000 dollars or less at the greater of 10 percent per year or 5 percentage points above the rate charged member banks by the 12th Federal Reserve District (Alaska Statutes Section 45.45.010). State the rate as a number and keep a smaller private loan at or below that ceiling unless you are an exempt or licensed lender.
A contract or loan commitment in which the principal amount exceeds 25,000 dollars is exempt from the Alaska rate limit (Alaska Statutes Section 45.45.010). This threshold is the key Alaska rule: at or below 25,000 dollars the cap applies, and above it the parties may set a higher agreed rate in writing. Confirm the size before you rely on the exemption.
If a written loan agreement does not state an interest rate, the legal rate on money after it is due in Alaska is 10.5 percent per year (Alaska Statutes Section 45.45.010). Always write the agreed rate into the agreement so this default does not apply by accident, and keep the agreed rate within the applicable cap on a loan of 25,000 dollars or less.
An Alaska Small Loans Act license from the Division of Banking and Securities is required only of a person who engages in the business of making loans of 25,000 dollars or less at a rate higher than a non-licensee could charge (Alaska Statutes Section 06.20.010). An individual making an occasional private loan is not in the business of lending and generally does not need a license. If you lend money repeatedly as a business, confirm whether you must be licensed before you lend.
A loan need not be written to be enforceable in Alaska, but writing it down is strongly advised. An agreed rate must be set by express agreement of the parties (Alaska Statutes Section 45.45.010), and a written contract carries a three-year period to sue (Alaska Statutes Section 09.10.053). Have both parties sign and date the agreement and keep a copy.
Alaska does not set a flat statutory late-fee cap for a private written loan. A late charge is enforceable as a reasonable estimate of the lender's actual costs from a late payment, not as a penalty. Set any late fee in an Alaska loan agreement as a reasonable amount tied to your real costs, and keep total charges within the applicable interest limit on a loan of 25,000 dollars or less.
Define default clearly, usually a payment missed past a stated grace period, a broken promise in the agreement, or the borrower insolvency. Include an acceleration clause so that on default the lender may declare the entire unpaid balance of principal and accrued interest immediately due. Stating any required notice and cure period avoids disputes about whether acceleration was proper.
A lawsuit to collect on a loan agreement must generally be filed within three years in Alaska, running from the default (Alaska Statutes Section 09.10.053, covering actions on a contract). Because that period is relatively short, keep a signed written agreement and act promptly. Confirm the current deadline before filing, since it can turn on when the last payment or written acknowledgment was made.
Frequently Asked Questions
A loan agreement is a written contract in which a lender lends money to a borrower who promises to repay it, usually with interest, on an agreed schedule. In Alaska it should name the parties, the principal, the interest rate as a number, the repayment dates, any late fee, and what counts as default. Because Alaska caps the contract rate on most private loans and fills a blank rate at 10.5 percent (Alaska Statutes Section 45.45.010), stating the rate in writing matters. A written contract can be enforced for three years.
For a private loan of 25,000 dollars or less, the maximum agreed rate is the greater of 10 percent per year or 5 percentage points above the rate charged member banks by the 12th Federal Reserve District, under Alaska Statutes Section 45.45.010. A loan whose principal exceeds 25,000 dollars is exempt from that limit, and banks and licensed lenders are governed by their own statutes. Keep a smaller private loan at or below the applicable cap.
A loan does not have to be in writing to be enforceable in Alaska, but writing it down is strongly advised. An agreed interest rate must be set by express agreement of the parties (Alaska Statutes Section 45.45.010), and a written contract carries a three-year period to sue (Alaska Statutes Section 09.10.053). A signed agreement that states the amount, the rate, and the repayment terms protects both sides if the loan is later disputed.
Not for a one-off private loan. An Alaska Small Loans Act license, regulated by the Division of Banking and Securities, is required only of a person who engages in the business of making loans of 25,000 dollars or less at a rate higher than a non-licensee could charge (Alaska Statutes Section 06.20.010). An individual who makes an occasional personal loan is not in the business of lending and generally does not need a license. If you lend repeatedly as a business, confirm whether you must be licensed.
Charging more than the applicable maximum on a private loan of 25,000 dollars or less is unlawful, and Alaska law can bar the lender from collecting the excess interest. Because a loan whose principal exceeds 25,000 dollars is exempt from the cap (Alaska Statutes Section 45.45.010), the usury limit applies mainly to smaller loans. The safest course on a smaller private loan is to keep the rate at or below the greater of 10 percent or 5 points above the 12th Federal Reserve District rate.
If a written loan agreement does not state an interest rate, the legal rate on money after it is due is 10.5 percent per year under Alaska Statutes Section 45.45.010. To charge a different agreed rate, up to the applicable cap on a loan of 25,000 dollars or less, you must state the rate in the agreement. Writing the rate down avoids a later dispute about what interest applies.
Yes, if the fee is reasonable. Alaska does not set a flat statutory late-fee cap for a private written loan, so a late charge is enforceable as a reasonable estimate of the lender's actual costs from a late payment rather than as a penalty. Tie any late fee in an Alaska loan agreement to your real costs, and keep total charges within the applicable interest limit on a loan of 25,000 dollars or less.
For a loan agreement, you generally have three years from the default to sue in Alaska (Alaska Statutes Section 09.10.053, which covers actions on a contract). Because that period is relatively short, keeping a signed written agreement and acting promptly gives you the stronger position if you have to collect. Confirm the current deadline before you file, since dates can turn on when the last payment was made.