New Hampshire Loan Agreement
A New Hampshire loan agreement sets the loan terms. The state has no general usury cap, and 10 percent applies only when the rate is not agreed in writing.
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Introduction
New Hampshire treats a loan agreement as a written contract recording the amount lent, the repayment schedule, and the interest owed, and the state sets no general usury ceiling, defaulting to 10 percent per year unless the parties agree otherwise in writing. In New Hampshire the interest rate is largely up to the parties. New Hampshire has no general usury ceiling: under RSA 336:1 the annual rate is 10 percent unless the parties otherwise agree in writing, and the statute lets them agree in writing to a different rate. So on an ordinary written loan the 10 percent figure is only a default that applies when the agreement is silent. Consumer credit transactions are treated separately, and consumer small loans are regulated on their own. Making an occasional private loan does not by itself require a license: a small loan lender license is required only of a person in the business of making small loans, and a small loan is a loan of 10,000 dollars or less at an annual percentage rate of 10 percent or more for personal, family, or household use (RSA 399-A:1 and 399-A:2). A one-off personal loan is not a licensed small loan. Once the rate is set, a sound New Hampshire 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 so both sides can prove them, and keep the signed agreement in case the loan is later disputed. DocDraft builds your New Hampshire loan agreement from your facts, with attorney review available before you sign.
Key Things to Know
- 1
This is a loan reduced to writing, listing the principal, the payment dates, and the rate, and because New Hampshire has no usury cap the parties may write in whatever rate they agree, with 10 percent applying only when they stay silent.
- 2
New Hampshire has no general usury cap. Under RSA 336:1 the annual rate of interest is 10 percent unless the parties otherwise agree in writing, and the statute lets them agree in writing to a different rate. On an ordinary written loan the rate you state controls, so write it in clearly.
- 3
The 10 percent figure is a default, not a ceiling. RSA 336:1 supplies 10 percent per year only when interest is not otherwise agreed upon in writing. To use a different rate on an ordinary loan, state that rate in the written agreement.
- 4
Consumer small loans are regulated separately. A small loan is a loan of 10,000 dollars or less at an annual percentage rate of 10 percent or more for personal, family, or household use (RSA 399-A:1). These consumer loans fall under the small loan lender rules rather than the general freedom-to-contract rule.
- 5
You do not need a license to make an occasional private loan. A small loan lender license is required only of a person who engages in the business of a small loan lender (RSA 399-A:2). An individual who makes a one-off personal loan, or a loan that is not a consumer small loan, is not in that business.
- 6
Set the rate and any fees in writing. Because RSA 336:1 applies 10 percent unless the parties agree otherwise in writing, a signed agreement is what fixes a different rate. New Hampshire sets no statutory late-fee cap for a plain 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 and include an acceleration clause so the lender can demand the full unpaid balance at once. New Hampshire generally requires a personal action, which covers a suit to collect a debt, to be brought within three years (RSA 508:4), so keep the signed agreement and act promptly.
Key decisions before you file
Before you file a Loan Agreement in New Hampshire, 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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New Hampshire Requirements for Loan Agreement
Maximum Interest Rate (No General Usury Cap)
New Hampshire has no general usury ceiling on an ordinary written loan. Under RSA 336:1 the annual rate is 10 percent unless the parties otherwise agree in writing, and the statute lets them agree in writing to a different rate. Because the rate you state controls, write it in as a clear number. Consumer small loans are regulated separately and are not governed by this free-contract rule.
Legal Rate When the Contract Is Silent
The 10 percent figure in RSA 336:1 is a default, not a ceiling. It supplies 10 percent per year only when interest is not otherwise agreed upon in writing. To use a different rate on an ordinary loan, state that rate in the written agreement. For a court judgment, the rate is set annually by the state treasurer based on the 26-week Treasury bill discount rate plus 2 percentage points.
Lender Licensing (Small Loan Lenders)
A small loan lender license is required only of a person who engages in the business of a small loan lender (RSA 399-A:2). An individual making an occasional private loan, or a loan that is not a consumer small loan, is not in that business and generally does not need a license. If you make consumer small loans as a business, confirm whether you must be licensed by the New Hampshire Banking Department before you lend.
What Counts as a Regulated Small Loan
New Hampshire defines a small loan as a title loan, payday loan, open-end loan, or closed-end loan that is 10,000 dollars or less, has an annual percentage rate of 10 percent or more, and is for personal, family, or household use (RSA 399-A:1). A loan that meets all three tests falls under the small loan rules; a one-off private loan that does not is governed by ordinary contract law and RSA 336:1.
Set the Rate in Writing
Because RSA 336:1 applies 10 percent unless the parties agree otherwise in writing, a signed written agreement is what fixes a different rate. Put the rate, the schedule, and the remedies in a writing both parties sign, so the terms are not left to memory and the 10 percent default does not apply by accident. Keep a copy of the signed agreement.
Late Fees Are a Matter of Contract
New Hampshire sets no general statutory late-fee cap for a plain private written 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. Licensed small loan lenders face separate limits under RSA 399-A that do not apply to a private one-off loan.
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
New Hampshire generally requires a personal action, which covers a suit to collect a debt, to be brought within three years under RSA 508:4, usually running from the default or the last payment. Because the period is relatively short, keep a signed written agreement and act promptly if the borrower stops paying. Confirm the current period and any exceptions before you rely on it.