Kansas Promissory Note
Kansas promissory note template with the 15% usury cap and 5-year statute of limitations under state law. Free template. Attorney review available.
Introduction
Kansas draws its usury line around the purpose of the loan, not the loan itself: a written promissory note used primarily for a personal, family, or household loan cannot carry more than 15% interest per year, but a note made primarily for a business or agricultural purpose is carved out of that cap entirely under Kansas Statutes Annotated Section 16-207. If a written note doesn't state a rate at all, Kansas defaults to 10% interest per year under K.S.A. 16-201. The template below turns these Kansas-specific rules into an actual fillable note rather than just a description of them. 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 makes a family loan, a small business loan, or a loan between friends enforceable if the maker doesn't pay. A Kansas promissory note doesn't need to be notarized or witnessed to be enforceable. A confession-of-judgment clause, letting the payee obtain a court judgment against the maker without filing a lawsuit, is void when used in a consumer credit transaction, so this template leaves one out. You generally have 5 years from a missed payment or the note's due date to sue to collect on a written note.
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
A written Kansas promissory note used primarily for a personal, family, or household loan cannot carry more than 15% interest per year. A note made primarily for a business or agricultural purpose is excluded from this cap entirely. If the note doesn't state a rate, interest defaults to 10% per year. (K.S.A. 16-207, K.S.A. 16-201)
- 3
A Kansas promissory note does not need to be notarized or witnessed to be enforceable. K.S.A. 84-3-104 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
A confession-of-judgment clause, which would let the payee obtain a court judgment against the maker without filing a lawsuit, is void if it's used to authorize judgment on a claim arising from a consumer credit transaction. (K.S.A. 16a-3-306)
- 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 Kansas. (K.S.A. 60-511)
- 6
If a Kansas promissory note is secured by personal property rather than real property, the lender generally needs to file a UCC-1 financing statement to protect its priority against other creditors. (K.S.A. 84-9-310)
- 7
Promissory notes are commonly used in Kansas for both informal loans, such as a family loan or a loan between friends, and business loans. If the lender is regularly engaged in the business of making loans rather than an individual private lender, a separate Uniform Consumer Credit Code cap of up to 36% per annum on a covered consumer loan may apply instead of Section 16-207's 15% figure.
Key decisions before you file
Before you file a Promissory Note in Kansas, 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 guideCustomize your Promissory Note Template with DocDraft
Kansas Requirements for Promissory Note
For a written note used primarily for a personal, family, or household purpose, the maximum is 15% per annum unless a higher rate is otherwise specifically authorized by law. A note made primarily for a business or agricultural purpose is excluded from this cap entirely. The default statutory rate absent a written contract rate is 10% per annum.
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.
Generally 5 years from a missed payment or the note's stated due date to sue to collect on a written promissory note.
A loan made primarily for a business or agricultural purpose, rather than a personal, family, or household purpose, is excluded from Section 16-207's 15% interest-rate cap entirely. The 15% figure is not a blanket cap that applies to every Kansas loan; it applies only to a loan primarily for personal use.
If a note is secured by personal property, the lender generally must file a UCC-1 financing statement to perfect and prioritize its security interest against other creditors.
UCCC licensing and its 36% per annum closed-end finance-charge cap apply only to a "lender" and "consumer loan" as defined, both of which require the person be regularly engaged in the business of making loans. An isolated private person-to-person promissory note does not trigger these requirements.
Kansas does not require a promissory note to be notarized or witnessed to be enforceable. K.S.A. 84-3-104'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.
An authorization letting a person confess judgment on a claim arising from a consumer credit transaction is void. A promissory note for a personal, family, or household loan should not include a confession-of-judgment or cognovit clause.
Frequently Asked Questions
For a written note used primarily for a personal, family, or household loan, Kansas caps interest at 15% per year. A note made primarily for a business or agricultural purpose is excluded from this cap entirely. If a written note doesn't state a rate, interest defaults to 10% per year.
No. K.S.A. 84-3-104 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.
Include the principal amount, the interest rate (within Kansas's usury cap for the loan's purpose), the repayment schedule, what counts as default, and the signatures of the maker and payee. Since a confession-of-judgment clause is void in a consumer credit transaction, don't include one in a personal loan; the note relies on a regular lawsuit for enforcement if the maker defaults.
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 K.S.A. 84-3-104: 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.
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 to protect its priority against other creditors.
The payee can declare the remaining balance immediately due (if the note includes an acceleration clause) and can sue to collect. A confession-of-judgment clause is void when used to authorize judgment on a claim from a consumer credit transaction, so a lender generally can't obtain a judgment against a personal-loan maker without filing a lawsuit.
Generally 5 years from a missed payment or the note's stated due date, under Kansas's statute of limitations for an action on a written contract (K.S.A. 60-511). Waiting too long can mean losing the right to sue on the note.
Yes. Promissory notes are commonly used in Kansas for both family loans and business loans, but the applicable interest-rate rule differs: a personal, family, or household loan is capped at 15% per year, while a note made primarily for a business or agricultural purpose is excluded from that cap. If the lender is regularly engaged in the business of making loans, a separate Uniform Consumer Credit Code cap of up to 36% per annum on a covered consumer loan may apply instead.