Missouri Promissory Note
Missouri promissory note template with the 10% usury cap (or market rate if higher) and 10-year SOL under state law. Free template. Attorney review available.
Introduction
Missouri's usury ceiling for a written promissory note is not one fixed number. Absent a written rate, the legal rate defaults to 9% per year. State a rate in writing and the general cap is 10% per year, but if the "market rate," a figure the Division of Finance publishes every quarter from long-term U.S. Treasury bond yields plus 3 percentage points, climbs above 10%, the cap floats up to that market rate instead, for any written loan, not carved out by whether the loan is personal or for a business. Charge above whichever cap applies and the borrower can recover double the interest paid, plus attorney's fees and court costs, in a suit brought within 5 years. The template below turns that formula into an actual fillable note rather than leaving the rate as a guess. 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 Missouri note doesn't need to be notarized or witnessed to be enforceable. Missouri is also unusual for still permitting a confession-of-judgment clause, letting the payee obtain a court judgment without a full lawsuit, though only through a formal written statement signed by the maker and verified by affidavit and filed with the court, not a clause that fires automatically on default. You generally have 10 years from a missed payment or the note's due date to sue to collect on a written note, longer than most states.
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
Absent a written rate, Missouri's legal interest rate defaults to 9% per year. With a written rate, the general cap is 10% per year, unless the state's quarterly "market rate" (long-term U.S. Treasury bond yields plus 3 percentage points, published by the Missouri Division of Finance) exceeds 10%, in which case the written cap floats up to that market rate instead. Charging above the applicable cap lets the borrower recover double the interest paid, plus attorney's fees and court costs, in a suit brought within 5 years. (RSMo Sections 408.020, 408.030, 408.050)
- 3
A Missouri promissory note does not need to be notarized or witnessed to be enforceable. RSMo Section 400.3-104 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
Missouri still permits a confession-of-judgment clause, letting the payee obtain a court judgment against the maker without a full lawsuit. It isn't a clause that takes effect automatically on default, though: it requires a separate written statement, signed by the maker and verified by affidavit, stating the amount owed and the facts showing it's justly due, and filed with the court. (RSMo Sections 511.070-511.080)
- 5
You generally have 10 years from a missed payment or the note's stated due date to sue to collect on a written promissory note in Missouri, longer than most states' limitations period. (RSMo Section 516.110)
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If a Missouri promissory note is secured by personal property rather than real property, the lender generally needs to file a UCC-1 financing statement, typically with the Missouri Secretary of State's UCC Filing Section in Jefferson City, to protect its priority against other creditors. (RSMo Section 400.9-310)
- 7
Promissory notes are commonly used in Missouri for family loans, small business loans, and LLC loans between members. A lender needs a Division of Finance consumer credit license only if it's regularly engaged in the business of making consumer credit loans; an occasional private loan doesn't trigger that licensing requirement. (RSMo Section 367.100)
Key decisions before you file
Before you file a Promissory Note in Missouri, 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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Missouri Requirements for Promissory Note
Absent a written rate, the legal rate defaults to 9% per annum (RSMo Section 408.020). With a written rate, the maximum is 10% per annum, unless the state's quarterly market rate, tied to long-term U.S. Treasury bond yields plus 3 percentage points, exceeds 10%, in which case the maximum floats up to that market rate instead.
No person may take interest above the rate allowed by RSMo Sections 408.020 to 408.040. A party who pays interest above the lawful rate may recover twice the amount paid, plus court costs and reasonable attorney's fees, in an action commenced within 5 years of the usurious payment.
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 10 years from a missed payment or the note's stated due date to sue on a written promise to pay money.
Missouri does not require a promissory note to be notarized or witnessed to be enforceable. Section 400.3-104's list of what makes a note a valid negotiable instrument does not include notarization; notarization is optional and used only for evidentiary purposes.
If a note is secured by personal property, the lender generally must file a UCC-1 financing statement, typically with the Missouri Secretary of State's UCC Filing Section, to perfect and prioritize its security interest against other creditors.
A "lender" required to be licensed by the Division of Finance is a person engaged in the business of making consumer credit loans. A person who makes only an occasional consumer credit loan is not a "lender" subject to this licensing chapter, so an isolated private person-to-person note does not trigger it.
Missouri permits a judgment by confession, entered without a lawsuit, but only through a written statement signed by the defendant and verified by affidavit, stating the amount owed and the facts showing it's justly due, and filed with the court. It is not a clause that takes effect automatically on default.
Frequently Asked Questions
Absent a written rate, Missouri's legal interest rate defaults to 9% per year. With a written rate, the general cap is 10% per year, unless the state's quarterly "market rate," tied to long-term U.S. Treasury bond yields plus 3 percentage points and published by the Missouri Division of Finance, exceeds 10%, in which case the written cap floats up to that market rate instead.
No. RSMo Section 400.3-104 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 Missouri's usury cap), the repayment schedule, what counts as default, and the signatures of the maker and payee. Missouri still allows a confession of judgment, but only through a separate written, verified statement filed with the court, not a boilerplate clause in the note, so this template relies on a regular lawsuit for enforcement instead.
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 RSMo Section 400.3-104: 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, typically with the Missouri Secretary of State's UCC Filing Section, 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. Missouri also permits a payee to pursue a confession of judgment, but only by filing a separate written statement, verified by affidavit, with the court; that isn't something built into this Note itself.
Generally 10 years from a missed payment or the note's stated due date, under RSMo Section 516.110's limitations period for an action on a written promise to pay money, longer than most states' deadline. Waiting too long can mean losing the right to sue on the note.
Yes. Promissory notes are commonly used in Missouri for both family loans and business or LLC loans. The same usury rules generally apply to both, and a lender needs a Division of Finance consumer credit license only if it's regularly engaged in the business of making loans, not for an occasional private loan.