Nevada Promissory Note

Introduction

Key Things to Know

1. 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. 2

   Nevada sets no statutory cap on the interest rate a maker and payee can write into a promissory note. Nevada Revised Statutes Section 99.050 lets them agree in writing to any rate, except that interest on consumer credit extended to a servicemember or dependent can't exceed the lesser of 36% per year or the federal maximum, or the agreement is void. If the note doesn't fix a rate in writing, the default rate is the prime rate at the largest Nevada bank plus 2% (Nevada Revised Statutes Section 99.040).

3. 3

   A Nevada promissory note does not need to be notarized or witnessed to be enforceable. Nevada Revised Statutes Section 104.3104, Nevada's version of Uniform Commercial Code Article 3, lists what makes a note a negotiable instrument, and notarization isn't one of the requirements.

4. 4

   Nevada permits a confession-of-judgment clause (letting the payee seek a court judgment without a full lawsuit), but acting on one takes more than a signature on the note itself: Nevada Revised Statutes Sections 17.090 through 17.110 require the maker to sign a separate written statement, verified under oath, and file it with the court clerk before judgment can be entered.

5. 5

   You generally have 6 years from the note's last payment or its stated due date to sue to collect on a written promissory note in Nevada (Nevada Revised Statutes Section 11.190(1)(b); Section 11.200).

6. 6

   If a Nevada note is secured by personal property rather than real property, the lender generally needs to file a UCC-1 financing statement with the Nevada Secretary of State to protect its priority against other creditors (Nevada Revised Statutes Section 104.9310).

7. 7

   Promissory notes are commonly used in Nevada for family loans, business loans, and loans between friends. An isolated private loan like this doesn't trigger the licensing requirements of Nevada's installment loan law, which apply only to a person "engaged in the business of lending," not an occasional private transaction (Nevada Revised Statutes Sections 675.020, 675.060).

Nevada Requirements for Promissory Note

• Maximum Legal Interest Rate (Nevada Revised Statutes Section 99.050)

  Nevada sets no statutory cap on the interest rate for a written contract; the maker and payee may agree to any rate. Interest on consumer credit extended to a covered servicemember or dependent may not exceed the lesser of 36% per annum or the federal maximum, or the agreement is void and unenforceable.

• Installment Lender Licensing Scope (Nevada Revised Statutes Sections 675.020, 675.060)

  Nevada's installment loan licensing requirements apply only to a person "engaged in the business of lending," not to isolated, incidental, or occasional private transactions. A private person-to-person promissory note does not trigger these requirements.

• Negotiable Instrument Requirements (Nevada Revised Statutes Section 104.3104)

  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 (Nevada Revised Statutes Section 11.190(1)(b))

  Generally 6 years from the note's last payment or its stated due date to sue to collect on a written promissory note.

• Secured Transaction Filing (Nevada Revised Statutes Section 104.9310)

  If a note is secured by personal property, the lender generally must file a UCC-1 financing statement with the Nevada Secretary of State to perfect and prioritize its security interest against other creditors.

• Confession of Judgment Permitted (Nevada Revised Statutes Sections 17.090 to 17.110)

  A confession-of-judgment clause is permitted but not self-executing; the payee can obtain judgment without a lawsuit only after the maker signs a separate written statement, verified under oath, filed with the court clerk.

• Default Statutory Interest Rate When No Rate Is Fixed (Nevada Revised Statutes Section 99.040)

  If a note does not fix a rate of interest in writing, the default rate is the prime rate at the largest bank in Nevada, as ascertained by the Commissioner of Financial Institutions, plus 2% per annum, adjusted each January 1 and July 1.

• Notarization Not Required for Validity (Nevada Revised Statutes Section 104.3104)

  Nevada does not require a promissory note to be notarized or witnessed to be enforceable. Section 104.3104'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.