Nebraska Loan Agreement
A Nebraska loan agreement sets the loan terms and caps private-loan interest at 16 percent per year, with 6 percent applying if the rate is left blank.
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Introduction
A loan agreement, in Nebraska, is the written record of money lent and a borrower's promise to repay it with interest, and the parties may set that interest at any rate up to 16 percent per year. In Nebraska the interest you can charge is capped. Under Nebraska Revised Statute 45-101.03, the parties may agree to any rate of interest not exceeding 16 percent per year, and if the agreement does not state a rate the law fills the gap at 6 percent per year (Section 45-102). That 16 percent cap binds a private individual lender no matter the size of the loan; the higher-loan exemptions in Section 45-101.04 run to banks, licensees, and other financial institutions, not to a private lender. Making an occasional private loan does not by itself require a license: a Nebraska installment loan license is required of a person in the business of making loans (Section 45-336), so a one-off personal loan is not licensed. Once the rate is set, a sound Nebraska 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 written contract can be enforced for five years, and a clear signed agreement is what protects both sides if the loan is later disputed. DocDraft builds your Nebraska loan agreement from your facts, with attorney review available before you sign.
Key Things to Know
- 1
The agreement is the written record of a loan, setting the principal, the payment schedule, and the interest rate, and Nebraska caps that rate on a private loan at 16 percent per year.
- 2
Nebraska caps interest on a private loan at 16 percent per year. Under Nebraska Revised Statute 45-101.03, the parties may agree to any rate of interest not exceeding 16 percent per annum. A private individual lender is bound by this 16 percent ceiling regardless of how large the loan is.
- 3
If a loan agreement does not state an interest rate, Nebraska law sets the legal rate at 6 percent per year on the unpaid principal (Nebraska Revised Statute 45-102). To charge more than 6 percent, up to the 16 percent cap, the parties must agree on the higher rate.
- 4
You do not need a license to make an occasional private loan. A Nebraska installment loan license from the Department of Banking and Finance is required of a person in the business of making loans (Nebraska Revised Statute 45-336). An individual who makes a one-off personal loan is not in the business of lending.
- 5
The higher-loan exemptions are for institutions, not private lenders. Nebraska Revised Statute 45-101.04 lifts the cap for business or agricultural loans made by licensed or insured institutions and for loans of 100,000 dollars or more to one financial institution, licensee, or permittee. A private lender does not get these exemptions and stays at 16 percent.
- 6
Set the rate in writing and give notice of any increase. The parties agree the rate up to 16 percent, and on a variable-rate consumer-goods loan the lender must give at least ten days' written notice before a rate increase takes effect (Nebraska Revised Statute 45-101.03).
- 7
Spell out default and acceleration, and keep the signed agreement. Define what counts as default, include an acceleration clause so the lender can demand the full unpaid balance at once, and remember that a lawsuit on a written contract must be filed within five years (Nebraska Revised Statute 25-205).
Key decisions before you file
Before you file a Loan Agreement in Nebraska, 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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Nebraska Requirements for Loan Agreement
Maximum Interest Rate (Usury Cap)
Nebraska caps interest on a private loan at 16 percent per year. Under Nebraska Revised Statute 45-101.03, the parties may agree to any rate of interest not exceeding 16 percent per annum. State the rate as a number and keep a private loan at or below 16 percent. A private individual lender is bound by this ceiling regardless of how large the loan is.
Legal Rate When the Contract Is Silent
If a loan agreement does not state an interest rate, Nebraska law fixes the legal rate at 6 percent per year on the unpaid principal balance (Nebraska Revised Statute 45-102). To charge more than 6 percent, up to the 16 percent cap, the parties must agree on the higher rate, best done in writing. Always write the agreed rate into the agreement so the 6 percent default does not apply by accident.
Lender Licensing (Installment Loan Act)
A Nebraska installment loan license from the Department of Banking and Finance is required of a person who is in the business of making loans (Nebraska Revised Statute 45-336). 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.
When the 16 Percent Cap Does Not Apply
The higher-loan exemptions in Nebraska Revised Statute 45-101.04 run to institutions, not private lenders. They lift the cap for business or agricultural loans made by a licensed or insured institution and for loans of 100,000 dollars or more to any one financial institution, licensee, or permittee. A private individual lender does not qualify for these exemptions and stays bound by the 16 percent ceiling.
Set the Rate in Writing
Nebraska sets the loan rate by agreement of the parties up to 16 percent (Nebraska Revised Statute 45-101.03); absent an agreed rate the 6 percent legal rate applies. Putting the rate and terms in a signed writing is strongly advised so both sides can prove what was agreed. Have both parties sign and date the agreement and keep a copy.
Notice Before Raising the Rate
If a loan on consumer goods carries a variable rate, Nebraska Revised Statute 45-101.03 requires the lender to give at least ten days' written notice before any increase in the rate takes effect. Build any variable-rate and notice terms into the agreement so a later rate change is enforceable and not a surprise to the borrower.
Default and Acceleration
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.
Time Limit to Sue on the Debt
A lawsuit to collect on a written loan agreement must generally be filed within five years in Nebraska, the period Nebraska Revised Statute 25-205 applies to an action upon any agreement, contract, or promise in writing, usually running from the default or the last payment. Keeping a signed written agreement gives you the written-contract period, which is easier to prove than an oral loan if you have to collect.