Wyoming Loan Agreement

Introduction

Key Things to Know

1. 1

   A loan agreement is the written contract that fixes a loan's amount, interest, repayment dates, and default terms. Because Wyoming places no general ceiling on an agreed rate, the number the parties commit to writing is the number that binds them.

2. 2

   Wyoming generally sets no usury cap on an agreed rate. Under the Wyoming Uniform Consumer Credit Code the parties may agree to a rate of interest, so the rate you write into the agreement controls. Confirm the current statute, and state the rate clearly as a number so there is no dispute later.

3. 3

   If a Wyoming loan agreement does not state a rate, the legal rate appears to be 7 percent per year (Wyo. Stat. Section 40-14-106(e)). This default only fills a gap; to charge a different rate, write the agreed rate into the agreement.

4. 4

   You generally do not need a license to make an occasional private loan. Wyoming licenses persons who engage in the business of making consumer loans and exempts supervised financial organizations (Wyo. Stat. Section 40-14-302), so a one-off personal loan is not that business.

5. 5

   Because Wyoming allows an agreed rate, the written rate is what matters. Keep the rate commercially reasonable and make sure the borrower understands and signs the agreement, since a court can still decline to enforce a term it finds unconscionable.

6. 6

   A late fee should be reasonable. Wyoming sets no flat statutory late-fee cap for a private loan, so tie any late charge to your real costs from a late payment; an amount that operates as an unreasonable penalty may not be enforced.

7. 7

   Put the loan in writing and spell out default and acceleration. Define default as a payment missed past a stated grace period, and include an acceleration clause so the lender can demand the entire unpaid balance at once if the borrower defaults. A lawsuit on a written contract can generally be brought for ten years (Wyo. Stat. Section 1-3-105).

Wyoming Requirements for Loan Agreement

• Maximum Interest Rate (No General Usury Cap)

  Wyoming generally sets no usury ceiling on an agreed rate. Under the Wyoming Uniform Consumer Credit Code the parties may agree to a rate of interest, so the rate written into the agreement is the rate that controls. State the rate as a clear number and keep it commercially reasonable, since a court may decline to enforce a rate it finds unconscionable. Confirm the current statute before relying on the no-cap rule.

• Legal Rate When the Contract Is Silent

  If a written loan agreement does not state an interest rate, Wyoming appears to fix the legal rate at 7 percent per year (Wyo. Stat. Section 40-14-106(e)). This default only fills a gap when the parties did not choose a rate. Because Wyoming generally lets the parties agree to a rate, always write the agreed rate into the agreement so the 7 percent default does not apply by accident. Confirm the current statute.

• Lender Licensing (Consumer Loan License)

  Wyoming licenses persons who engage in the business of making consumer loans and exempts supervised financial organizations such as banks and credit unions (Wyo. Stat. Section 40-14-302). 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 your obligations with the Division of Banking before you lend.

• No Rate Cap Means the Written Rate Controls

  Because Wyoming generally imposes no usury cap, the rate you write into the agreement governs and there is no per-loan interest ceiling for a private lender under the Uniform Consumer Credit Code. The practical limit is unconscionability: a Wyoming court can decline to enforce a rate or term it finds unconscionable. Set a commercially reasonable rate, state it plainly, and make sure the borrower understands and signs.

• Late Fees Should Be Reasonable

  Wyoming sets no flat statutory late-fee cap for a private one-off loan, so a late charge is judged under general contract law. Set any late fee as a reasonable estimate of the lender's actual costs from a late payment rather than an arbitrary penalty, because an amount that operates as a penalty may not be enforced. State the late fee and any grace period clearly in the agreement.

• Put the Loan in Writing

  A loan need not be written to be enforceable in Wyoming, but writing it down is strongly advised. Because Wyoming generally lets the parties agree to a rate, the written rate is what controls, and a silent loan appears to default to the 7 percent legal rate (Wyo. Stat. Section 40-14-106(e)). A written contract also carries a longer period to sue, generally ten years. Have both parties sign and date the agreement and keep a copy.

• 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 ten years in Wyoming (Wyo. Stat. Section 1-3-105(a)(i)), while an unwritten contract carries an eight-year limit. Keeping a signed written agreement gives the longer, easier-to-prove period if you have to collect. Confirm the current statute before relying on these periods.