Nevada Loan Agreement
A Nevada loan agreement sets the loan terms. Nevada has no general usury cap, so the parties may agree in writing to any rate, with a 36 percent military limit.
Find out where you stand in Nevada
What kind of loan are you putting in writing?
DocDraft provides document preparation, not legal advice.
Introduction
A Nevada loan agreement documents the money lent, how it is repaid, and the interest owed in a single written contract, and because Nevada sets no general usury ceiling, the parties may write in any rate they choose. In Nevada the interest rate is largely up to the parties. Nevada has no general usury ceiling: under NRS 99.050 the parties may agree for the payment of any rate of interest, for compounding, and for any other charges or fees, as long as the rate is specified in writing. The one rate cap is a 36 percent limit for a covered servicemember or dependent (NRS 99.050(2)). If the agreement does not fix a rate in writing, the legal rate under NRS 99.040 is the prime rate at the largest bank in Nevada plus 2 percent. Making an occasional private loan does not by itself require a license: a license is required only of a person who engages in the business of lending (NRS 675.060), and the business of lending does not include isolated, incidental, or occasional transactions (NRS 675.020), so a one-off personal loan is not licensed. Once the rate is set, a sound Nevada 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 six years, and a clear signed agreement is what protects both sides if the loan is later disputed. DocDraft builds your Nevada loan agreement from your facts, with attorney review available before you sign.
Key Things to Know
- 1
Picture the agreement as a loan put on paper, naming the amount, the due dates, and the rate, and since Nevada imposes no usury cap, the interest figure the parties specify in writing is the one that governs.
- 2
Nevada has no general usury cap. Under NRS 99.050 the parties may agree for the payment of any rate of interest, for compounding, and for any other charges or fees, as long as the rate is specified in writing. Because there is no ceiling, the rate you write into the agreement controls.
- 3
The one rate cap is for military borrowers. NRS 99.050 limits the annual percentage rate charged to a covered servicemember or dependent to the lesser of 36 percent or the maximum rate allowed by federal law. This is the exception to Nevada's freedom-of-contract rule on interest.
- 4
If the agreement does not fix a rate in writing, Nevada supplies a legal rate. Under NRS 99.040 it is the prime rate at the largest bank in Nevada, as set by the Commissioner of Financial Institutions on the preceding January 1 or July 1, plus 2 percent. Stating your rate in writing avoids that default.
- 5
You do not need a license to make an occasional private loan. A license is required only of a person who engages in the business of lending (NRS 675.060), and the business of lending does not include isolated, incidental, or occasional transactions (NRS 675.020). An individual who makes a one-off personal loan is not in the business of lending.
- 6
Set the rate and any fees in writing. Nevada enforces the rate, compounding, and fees the parties agree to under NRS 99.050, so put them in a signed agreement. Nevada sets no statutory late-fee cap for a private loan, so keep any late fee reasonable and clearly stated.
- 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 six years (NRS 11.190).
Key decisions before you file
Before you file a Loan Agreement in Nevada, a few decisions shape the document: which option to choose and what each one means. The Loan Agreement guide walks through them.
Open the Loan Agreement guideCustomize your Loan Agreement Template with DocDraft
Nevada Requirements for Loan Agreement
Nevada has no general usury ceiling. Under NRS 99.050 the parties may agree for the payment of any rate of interest, for compounding, and for any other charges or fees, as long as the rate is specified in writing. Because there is no cap, the rate written into the agreement controls, so state it as a clear number.
If the agreement does not fix a rate in writing, Nevada supplies a legal rate under NRS 99.040: the prime rate at the largest bank in Nevada, as ascertained by the Commissioner of Financial Institutions on the preceding January 1 or July 1, plus 2 percent. To lock in a specific rate, state it in the written agreement so this floating default does not apply.
Nevada's one rate cap protects military borrowers. Under NRS 99.050 the annual percentage rate charged to a covered servicemember or dependent may not exceed the lesser of 36 percent or the maximum rate authorized under federal law. If the borrower may be a covered servicemember or dependent, keep the rate within this limit.
A license under the Installment Loan and Finance Act is required only of a person who engages in the business of lending in Nevada (NRS 675.060). NRS 675.020 provides that the business of lending does not include isolated, incidental, or occasional transactions, so an individual making a one-off private loan generally does not need a license. If you lend money repeatedly as a business, confirm whether you must be licensed before you lend.
Nevada enforces the rate, compounding, and any other charges or fees the parties agree to under NRS 99.050, but the rate must be specified in writing to be set by agreement. Put the rate and fees in a signed agreement so both sides can prove the terms, and so the floating legal rate in NRS 99.040 does not apply by default. Have both parties sign and date the agreement and keep a copy.
Nevada sets no general statutory late-fee cap for a plain private loan; charges and fees are by agreement under NRS 99.050. A late fee is therefore enforced as a matter of contract. Tie any late fee to your real costs from a late payment rather than an arbitrary penalty, and state it clearly in the agreement so it is easy to enforce.
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 written loan agreement must generally be filed within six years in Nevada, the period NRS 11.190 sets for an action founded on an instrument in writing, usually running from the default or the last payment. An oral loan carries only a four-year limit. Keeping a signed written agreement gives the longer, easier-to-prove period if you have to collect.
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 Nevada 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 Nevada has no general usury cap and lets the parties agree to any rate in writing (NRS 99.050), the rate you state in the agreement controls. A written contract can also be enforced for six years.
Nevada has no general maximum. Under NRS 99.050 the parties may agree in writing for the payment of any rate of interest, so an ordinary private loan has no usury ceiling in Nevada. The one exception is a 36 percent cap on the annual percentage rate charged to a covered servicemember or dependent (NRS 99.050(2)). If the agreement does not fix a rate in writing, NRS 99.040 supplies the prime rate at the largest bank in Nevada plus 2 percent.
A loan does not have to be in writing to be enforceable in Nevada, but writing it down is important because the interest rate must be specified in writing to be set by agreement under NRS 99.050. Absent a written rate, the legal rate in NRS 99.040 applies. A written contract also carries a six-year period to sue, versus four years for an oral one (NRS 11.190), so a signed agreement protects both sides.
Not for a one-off private loan. A license under the Installment Loan and Finance Act is required only of a person who engages in the business of lending (NRS 675.060), and NRS 675.020 provides that the business of lending does not include isolated, incidental, or occasional transactions. An individual who makes an occasional personal loan is not in the business of lending. If you lend repeatedly as a business, you likely need to be licensed.
Because Nevada has no general usury ceiling for an ordinary loan, there is generally no usury penalty on a rate the parties set in writing (NRS 99.050). The main limit is the 36 percent cap for covered military borrowers, and a charge can still be challenged if it is unconscionable. Even without a cap, it is wise to keep the rate reasonable and clearly stated so the agreement is easy to enforce.
If a loan agreement does not fix a rate in writing, Nevada supplies the legal rate under NRS 99.040: the prime rate at the largest bank in Nevada, as ascertained by the Commissioner of Financial Institutions on the preceding January 1 or July 1, plus 2 percent. To lock in a specific rate, state it in a written agreement, which NRS 99.050 requires to set the rate by agreement.
Yes. Nevada lets the parties agree to charges and fees under NRS 99.050 and sets no general statutory late-fee cap for a plain private loan, so a late fee is enforced as a matter of contract. Tie any late fee to your real costs from a late payment rather than an arbitrary penalty, and state it clearly in the agreement so it is easy to enforce.
For a written loan agreement, you generally have six years to sue in Nevada under NRS 11.190, which sets that period for an action founded on an instrument in writing. An oral loan carries a shorter four-year limit. The clock usually runs from the default or the last payment. Keeping a signed written agreement gives the longer, easier-to-prove period if you have to collect.