Idaho Promissory Note

Q: Does a promissory note need to be notarized in Idaho?

No. Idaho Code Section 28-3-104 lists what makes a note a valid, enforceable negotiable instrument, and notarization isn't one of the requirements. Notarizing a note is optional and can help as evidence of who signed it, but it doesn't affect enforceability.

Q: How do I write a promissory note in Idaho?

Include the principal amount, the interest rate (any rate is enforceable once it's set out in writing, or 12% by default if the note is silent), the repayment schedule, what counts as default, and the signatures of the maker and payee. Idaho's own negotiable-instruments statute allows a confession-of-judgment clause in principle, but it's void for a personal, family, or household loan and Idaho doesn't spell out a clear procedure to enforce one otherwise, so it's safest to leave one out and rely on a regular lawsuit if the maker defaults.

Q: Is a promissory note legally binding in Idaho?

Yes, as long as it meets the basic requirements of a valid contract and, if it's meant to be a negotiable instrument, the elements in Idaho Code Section 28-3-104: an unconditional promise to pay a fixed amount, a signature, and payment on demand or by a definite date. It doesn't need to be notarized to be enforceable.

Q: What's the difference between a secured and unsecured promissory note in Idaho?

An unsecured note relies only on the maker's promise to pay. A secured note is backed by collateral, and if it's secured by personal property rather than real estate, the lender generally needs to file a UCC-1 financing statement with the Idaho Secretary of State to protect its priority against other creditors.

Q: What happens if the maker defaults on a promissory note in Idaho?

The payee can declare the remaining balance immediately due (if the note includes an acceleration clause) and can sue to collect. Idaho's negotiable-instruments statute doesn't ban a confession-of-judgment clause outright the way some states do, but such a clause is void for a personal, family, or household loan, and Idaho doesn't lay out a clear court procedure for enforcing one in other situations, so a regular lawsuit is generally how a payee collects.

Q: Can I use a promissory note for a family loan or an LLC loan in Idaho?

Yes. Promissory notes are commonly used for both family loans and business or LLC loans in Idaho. The same rate-by-agreement rule and 12% default rate apply either way. An isolated private loan generally doesn't trigger Idaho Credit Code licensing, which attaches to a person who advertises, offers, or solicits to make loans for a consumer purpose, not to a one-off loan between family members or into an LLC.

Idaho promissory note template: no statutory cap on written-contract interest, 12% default rate, 5-year SOL. Free template. Attorney review available.

Introduction

In 2024, Idaho lawmakers considered a bill to cap the interest rate on a written loan contract at 30% per year, or 10 points over the prime rate. It never made it into the Idaho Code. As things stand, Idaho places no statutory ceiling at all on the rate a maker and payee can fix in a written promissory note, whether the loan is between family, friends, or a small business, and the same rate-by-agreement rule applies even to a licensed lender's regulated consumer loans. The only number Idaho Code sets is a fallback: if a note doesn't state a rate in writing, interest defaults to 12% per year (Idaho Code Section 28-22-104). A promissory note itself is a written, signed promise by one party, the maker, to pay a definite sum of money to another party, the payee, either on demand or by a set date, and it's what turns that agreement into a debt the payee can actually enforce. An Idaho note doesn't need to be notarized or witnessed to be enforceable. Idaho's own negotiable-instruments statute is unusually direct about confession-of-judgment clauses: it lists a power to confess judgment as a type of clause a note can validly include, though such a clause is void if the loan is for a personal, family, or household purpose. You generally have 5 years from a missed payment or the note's due date to sue to collect on a written note.

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Key Things to Know

1
A promissory note is a written, signed promise by one party (the maker) to pay a definite sum of money to another party (the payee), either on demand or by a set date.
2
Idaho sets no statutory cap on the interest rate the maker and payee can fix in a written contract; the parties may agree to any rate. If a note doesn't state a rate, interest defaults to 12% per year (Idaho Code Section 28-22-104). The Idaho Credit Code's own maximum finance charge for a licensed lender's regulated consumer loans is likewise "that which is agreed upon between the parties" (Idaho Code Section 28-42-201), so there's no separate lower ceiling for a licensed loan either. A 2024 bill to add a 30%-or-10-over-prime cap did not become law.
3
An Idaho promissory note does not need to be notarized or witnessed to be enforceable. Idaho Code Section 28-3-104 lists what makes a note a valid negotiable instrument (an unconditional promise, a fixed amount, a signature, payable on demand or by a definite date), and notarization isn't one of the requirements.
4
Idaho Code Section 28-3-104 expressly permits a note to include "an authorization or power to the holder to confess judgment" (letting the payee obtain a court judgment without a full lawsuit) without losing its status as a valid negotiable instrument. That authorization is void, however, if the note is for a personal, family, or household purpose, since Idaho Code Section 28-43-305 bans confession of judgment in a "regulated consumer credit transaction."
5
You generally have 5 years from a missed payment or the note's stated due date to sue to collect on a written promissory note in Idaho. (Idaho Code Section 5-216)
6
If an Idaho promissory note is secured by personal property rather than real property, the lender generally needs to file a UCC-1 financing statement with the Idaho Secretary of State to protect its priority against other creditors. (Idaho Code Section 28-9-310)
7
Promissory notes are commonly used in Idaho for family loans, business loans, and loans between friends. An isolated private loan generally doesn't trigger Idaho Credit Code licensing, which attaches to a person who advertises, offers, or solicits to make a loan for a consumer purpose (Idaho Code Section 28-41-201).

Key decisions before you file

Before you file a Promissory Note in Idaho, a few decisions shape the document: which option to choose and what each one means. The Promissory Note guide walks through them.

Open the Promissory Note guide

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IDAHO PROMISSORY NOTE

Principal Amount: $[PRINCIPAL AMOUNT] Date: [DATE] Location: [CITY], Idaho

1. PARTIES

Maker (Borrower): [MAKER'S FULL LEGAL NAME], of [MAKER'S ADDRESS]

Payee (Lender): [PAYEE'S FULL LEGAL NAME], of [PAYEE'S ADDRESS]

For value received, the Maker promises to pay to the order of the Payee the Principal Amount stated above, together with interest as set forth below.

2. PRINCIPAL AMOUNT

Principal: $[PRINCIPAL AMOUNT]

3. INTEREST RATE

Rate: [RATE]% per annum.

Idaho interest-rate rule: Idaho sets no statutory cap on the interest rate the Maker and Payee may fix in this written Note; the parties may agree to any rate. If this Note is silent as to rate, interest defaults to 12% per annum (Idaho Code Section 28-22-104).

4. REPAYMENT SCHEDULE

[SELECT ONE:]

Installments: $[PAYMENT AMOUNT] due on the [DAY] of each month, beginning [START DATE], until paid in full.
On demand: Payable in full upon written demand by the Payee.
Lump sum: The entire unpaid Principal and accrued interest are due in full on [MATURITY DATE].

5. LATE PAYMENT, DEFAULT, AND ACCELERATION

A payment not received within [NUMBER] days of its due date is late, and a late fee of $[AMOUNT] or [PERCENTAGE]% of the overdue payment may apply. Upon default, the Payee may declare the entire unpaid Principal and accrued interest immediately due and payable (acceleration). This Note does not include a confession-of-judgment clause. Idaho Code Section 28-3-104 allows a note to include such a clause, but it is void if this Note is for a personal, family, or household purpose (Idaho Code Section 28-43-305), and Idaho does not spell out a clear court procedure for enforcing one outside that context. Enforcement after a default therefore relies on the Payee pursuing a regular lawsuit.

6. PREPAYMENT

The Maker may prepay all or part of the Principal at any time without penalty, unless a prepayment penalty is separately negotiated and stated here: [PREPAYMENT TERMS, IF ANY].

7. GOVERNING LAW

This Note is governed by the laws of the State of Idaho. An action to collect on this Note must generally be brought within 5 years of a missed payment or this Note's due date (Idaho Code Section 5-216). If this Note is secured by personal property rather than real estate, the Payee should file a UCC-1 financing statement with the Idaho Secretary of State to protect its priority against other creditors (Idaho Code Section 28-9-310).

SIGNATURES

Maker Signature: _________________________ Printed Name: [MAKER'S FULL LEGAL NAME] Date: [DATE]

Notary Acknowledgment (optional; notarization is not required for this Note to be enforceable in Idaho, but may be added for evidentiary purposes): _________________________

Governed by Idaho Code Section 28-22-104 (interest rate) and Idaho Code Section 5-216 (statute of limitations). This is a template; consult the current statute or an attorney to confirm details for your situation, attorney review is available and optional. For the full national Promissory Note template, see the full Promissory Note template.

Once your Promissory Note is ready, you can check whether it needs to be notarized in Idaho in about a minute, and notarize it online through DocDraft if it does.

Idaho Requirements for Promissory Note

Notarization Not Required for Validity (Idaho Code Section 28-3-104)
Idaho does not require a promissory note to be notarized or witnessed to be enforceable. Idaho Code Section 28-3-104's list of what makes a note a valid negotiable instrument does not include notarization or witnessing; notarization is optional and used only for evidentiary purposes.
Maximum Legal Interest Rate (Idaho Code Section 28-22-104)
Idaho sets no statutory cap on the interest rate the parties may fix in a written contract; if the contract does not state a rate, interest defaults to 12% per annum.
Regulated Consumer Loan Finance Charge (Idaho Code Section 28-42-201)
The Idaho Credit Code sets the maximum finance charge for a licensed lender's regulated consumer loans as the rate agreed upon between the parties, with no separate statutory ceiling.
Negotiability Requirements (Idaho Code Section 28-3-104)
To be a valid negotiable instrument, a note must be an unconditional promise to pay a fixed amount, signed by the maker, and payable on demand or at a definite time.
Statute of Limitations (Idaho Code Section 5-216)
Generally 5 years from a missed payment or the note's stated due date to sue to collect on a written promissory note.
Secured Transaction Filing (Idaho Code Section 28-9-310)
If a note is secured by personal property, the lender generally must file a UCC-1 financing statement with the Idaho Secretary of State to perfect and prioritize its security interest.
Confession of Judgment Permitted, Except for Consumer-Purpose Loans (Idaho Code Sections 28-3-104 and 28-43-305)
Idaho's negotiable-instruments statute permits a note to include a power to confess judgment without losing negotiability, but that authorization is void if the note is for a personal, family, or household purpose (a "regulated consumer credit transaction").
Idaho Credit Code Licensing Scope (Idaho Code Section 28-41-201)
Idaho Credit Code licensing attaches to a person who advertises, offers, or solicits to make a loan for a consumer purpose; an isolated private person-to-person promissory note does not trigger these requirements.

Does your Promissory Note need to be notarized in Idaho?

Whether a Promissory Note needs to be notarized depends on your state. Upload yours, pick your state, and get the current rule with the official source behind it, free and with no account. If yours does need a notary, online notarization is part of your DocDraft plan.

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Frequently Asked Questions

What is the maximum legal interest rate in Idaho?

Does a promissory note need to be notarized in Idaho?

How do I write a promissory note in Idaho?

Is a promissory note legally binding in Idaho?

What's the difference between a secured and unsecured promissory note in Idaho?

What happens if the maker defaults on a promissory note in Idaho?

How long do I have to collect on a promissory note in Idaho?

Can I use a promissory note for a family loan or an LLC loan in Idaho?

Introduction

Key Things to Know

Key decisions before you file

Customize your Promissory Note Template with DocDraft

IDAHO PROMISSORY NOTE

1. PARTIES

2. PRINCIPAL AMOUNT

3. INTEREST RATE

4. REPAYMENT SCHEDULE

5. LATE PAYMENT, DEFAULT, AND ACCELERATION

6. PREPAYMENT

7. GOVERNING LAW

SIGNATURES

Idaho Requirements for Promissory Note

Notarization Not Required for Validity (Idaho Code Section 28-3-104)

Maximum Legal Interest Rate (Idaho Code Section 28-22-104)

Regulated Consumer Loan Finance Charge (Idaho Code Section 28-42-201)

Negotiability Requirements (Idaho Code Section 28-3-104)

Statute of Limitations (Idaho Code Section 5-216)

Secured Transaction Filing (Idaho Code Section 28-9-310)

Confession of Judgment Permitted, Except for Consumer-Purpose Loans (Idaho Code Sections 28-3-104 and 28-43-305)

Idaho Credit Code Licensing Scope (Idaho Code Section 28-41-201)

Does your Promissory Note need to be notarized in Idaho?

Frequently Asked Questions