Louisiana Promissory Note
Louisiana promissory note template within the 12% usury cap and 5-year prescriptive period under state civil law. Free template. Attorney review available.
Introduction
Louisiana runs on civil law, not the common-law rules most other states share, and that shows up directly in how a note gets signed and collected. An ordinary Louisiana note only needs the maker's signature to be enforceable, what the Civil Code calls an "act under private signature." But if the note is tied to a mortgage or pledge and the maker wants the fastest possible collection route, the note instead needs to be a notarized "authentic act" that "imports a confession of judgment," which lets the payee use executory process, a Louisiana-specific procedure that seizes and sells the secured property without a prior lawsuit or hearing. A promissory note is still, at its core, a written, signed promise by one party, the maker, to pay a definite sum of money to another party, the payee, on demand or by a set date, and this template turns that Louisiana-specific structure into an actual fillable note. For a general private loan, Louisiana caps conventional interest at 12% per year, though loans for commercial, business, or agricultural purposes, and loans secured by a mortgage on real estate, are exempt from that cap entirely. Confession-of-judgment clauses are restricted rather than banned: they're prohibited before the note's maturity date, but permitted afterward for executory process. You generally have 5 years from the date payment becomes due to sue to collect on a written note, a deadline Louisiana calls "liberative prescription."
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
For a general private loan, Louisiana caps conventional (agreed-upon) interest at 12% per year, and the rate must be fixed in writing. Loans made for commercial, business, or agricultural purposes, and loans secured directly or indirectly by a mortgage on real estate, are exempt from the 12% cap entirely. (La. Rev. Stat. Section 9:3500)
- 3
A basic Louisiana note is enforceable as an "act under private signature," meaning it needs only the maker's signature, no notary and no witnesses, to be valid. (La. Civ. Code Article 1837)
- 4
Notarization becomes relevant only if the payee wants the note tied to a mortgage or pledge to qualify as an "authentic act" (signed before a notary and two witnesses). That formal act, if it "imports a confession of judgment," lets the payee use executory process, an expedited seizure-and-sale procedure, instead of a full lawsuit. (La. Civ. Code Article 1833; La. Code Civ. Proc. Articles 2631-2632)
- 5
Confession-of-judgment clauses are restricted, not banned: Louisiana prohibits confessing judgment before the note's maturity date, but permits it afterward specifically for executory process on a secured note. (La. Rev. Stat. Section 9:3590)
- 6
You generally have 5 years from the day payment becomes due (a missed installment or the note's maturity date) to sue to collect on a written promissory note in Louisiana. Louisiana's civil-law system calls this deadline "liberative prescription" rather than a statute of limitations. (La. Civ. Code Article 3498)
- 7
If a Louisiana promissory note is secured by movable (personal) property, the lender generally needs to file a UCC-1 financing statement, typically with the Louisiana Secretary of State, to protect its priority against other creditors. A note secured by real estate instead requires a recorded act of mortgage. (La. Rev. Stat. Section 10:9-310)
Key decisions before you file
Before you file a Promissory Note in Louisiana, a few decisions shape the document: which option to choose and what each one means. The Promissory Note guide walks through them.
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Louisiana Requirements for Promissory Note
An ordinary Louisiana note is enforceable as an act under private signature, needing only the maker's signature. A notary and two witnesses are required only to execute the note as an authentic act, a separate, more formal category used when the law prescribes it or the payee wants access to executory process.
For a general private loan, conventional interest may not exceed 12% per annum, and the rate must be fixed in writing. Loans for commercial, business, or agricultural purposes, and loans secured directly or indirectly by a mortgage on real estate, are exempt from this cap.
For a fixed-rate, simple-interest commercial, business, or agricultural loan entered into after September 7, 1990, a post-default rate increase is capped at 18% per annum or 3 percentage points over the original contract rate (whichever is greater) for an original principal of $250,000 or less, and 21% per annum or 3 percentage points over the original rate (whichever is greater) for a larger original principal.
If a note is secured by movable property, a financing statement generally must be filed, typically with the Louisiana Secretary of State, to perfect the security interest against other creditors.
To be a negotiable instrument, a note must be an unconditional promise to pay a fixed amount, payable to bearer or to order, and payable on demand or at a definite time.
An action on a promissory note, negotiable or not, is subject to a liberative prescription of 5 years, running from the day payment becomes due (a missed payment or the note's maturity date).
The Louisiana Consumer Credit Law's licensing and disclosure requirements apply to a loan made by a supervised financial organization or a licensed lender for personal, family, or household purposes. An isolated private person-to-person note does not trigger these requirements.
Confessing judgment before a note's maturity date is prohibited. After maturity, a note or mortgage act that imports a confession of judgment and is supported by authentic evidence can let the payee use executory process, an expedited seizure-and-sale procedure, instead of an ordinary lawsuit.
Frequently Asked Questions
For a general private loan, Louisiana caps conventional interest at 12% per year, and the rate must be fixed in writing. This cap does not apply to a loan for commercial, business, or agricultural purposes, or a loan secured directly or indirectly by a mortgage on real estate; those loans can carry a higher agreed-upon rate.
No, not for basic validity. Louisiana treats an ordinary signed note as an "act under private signature," which needs only the maker's signature. Notarization matters only if the note is tied to a mortgage or pledge and the payee wants access to executory process, an expedited collection procedure that requires the note to be executed as a notarized "authentic act."
Include the principal amount, the interest rate (within Louisiana's 12% usury cap unless an exemption applies), the repayment schedule, what counts as default, and the maker's signature. Only include a confession-of-judgment clause if the note is secured and executed as an authentic act before a notary and two witnesses, since a bare private-signature note can't use Louisiana's executory-process shortcut.
Yes. A note signed by the maker as an act under private signature is enforceable in an ordinary lawsuit without any notarization or witnesses. A note only needs the more formal "authentic act" treatment (notary plus two witnesses) if the payee wants to use it, together with a mortgage or pledge, to access Louisiana's executory-process collection procedure.
An unsecured note relies only on the maker's promise to pay. A secured note is backed by collateral; if it's secured by movable (personal) property, the lender generally needs to file a UCC-1 financing statement, typically with the Louisiana Secretary of State, to protect its priority. If it's secured by real estate, a recorded act of mortgage is used instead, and if that mortgage act is notarized and imports a confession of judgment, it can also open the door to executory process.
The payee can declare the remaining balance immediately due (if the note includes an acceleration clause) and can sue to collect. Confessing judgment before the note's maturity date is prohibited in Louisiana; confession of judgment is permitted only after maturity, and only helps the payee if the note or mortgage act was executed as an authentic act importing a confession of judgment, which then allows executory process instead of an ordinary lawsuit.
Generally 5 years from the day payment becomes due, a missed installment or the note's stated maturity date, under Louisiana's liberative prescription rule for actions on promissory notes (Civil Code Article 3498). Waiting too long can mean losing the right to sue on the note.
Yes. Promissory notes are commonly used for both family loans and business or LLC loans in Louisiana. A family loan generally falls under the 12% conventional-interest cap, while a note for a business or agricultural purpose is exempt from that cap and the parties can agree to a higher rate in writing, subject to the separate post-default rate-increase limits on commercial loans.