Oregon Promissory Note
Oregon promissory note template: usury cap applies only to loans of $50,000 or less, 6-year statute of limitations. Free template. Attorney review available.
Introduction
Draw a line at $50,000 in Oregon, and a promissory note's interest rate options change completely. Below that line, family loan, farm loan, or small business loan alike, Oregon Revised Statutes Section 82.010 caps the rate at the greater of 12% per annum or 5 points over the Federal Reserve discount rate, the identical ceiling regardless of purpose. Cross above $50,000, and the ceiling disappears; the maker (borrower) and payee (lender) may agree in writing to any rate. A note that never states a rate defaults to 9%. A promissory note itself is simpler than the rate math around it: a written, signed promise by the maker to pay a definite sum to the payee, on demand or by a set date, the paper trail that makes a loan enforceable if the maker doesn't pay. An Oregon note doesn't need to be notarized or witnessed to be enforceable. A confession-of-judgment clause, letting the payee obtain a court judgment without a full lawsuit, can't be written into the note itself under Oregon Rule of Civil Procedure 73, and is barred outright for a personal, family, or household loan; confirm the current rule before relying on it for a business note. You generally have 6 years from a missed payment or due date to sue 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
Oregon caps the interest rate on a loan of $50,000 or less, whether it's a personal, family, business, or agricultural loan, at the greater of 12% per annum or 5 percentage points over the Federal Reserve discount rate on 90-day commercial paper. A loan over $50,000 carries no statutory rate ceiling at all; the maker and payee may agree in writing to any rate. Absent a written rate, interest defaults to 9% per annum. (Oregon Revised Statutes Section 82.010(1), (3))
- 3
Several categories of lender and loan are exempt from the $50,000-or-less cap entirely, including financial institutions, consumer finance and pawnbroker licensees, HUD-approved mortgage lenders, and loans secured by a first lien on real property; confirm the current exemption list before relying on it (Oregon Revised Statutes Section 82.025). A lender who charges above the applicable cap forfeits the right to collect any interest, and the borrower owes only the principal. (Oregon Revised Statutes Section 82.010(4))
- 4
An Oregon promissory note does not need to be notarized or witnessed to be enforceable. Oregon Revised Statutes Section 73.0104, Oregon's version of Uniform Commercial Code Article 3, 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.
- 5
A confession-of-judgment clause (letting the payee get a court judgment against the maker without a full lawsuit) can't operate as written into the original note itself under Oregon Rule of Civil Procedure 73; any such authorization must be a separate statement, signed and verified by the maker only after the debt is already due, then filed with the court. For a loan for personal, family, or household purposes, confession of judgment is barred outright; confirm the current rule before relying on it for a business note.
- 6
You generally have 6 years from a missed payment or the note's stated due date to sue to collect on a written promissory note in Oregon, running from the breach itself rather than from when the missed payment was discovered. (Oregon Revised Statutes Section 12.080)
- 7
If an Oregon note is secured by personal property rather than real property, the lender generally needs to file a UCC-1 financing statement with the Oregon Secretary of State to protect its priority against other creditors. (Oregon Revised Statutes Section 79A.3100, renumbered from Section 79.0310 in 2025)
Key decisions before you file
Before you file a Promissory Note in Oregon, 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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Oregon Requirements for Promissory Note
For a loan of $50,000 or less, whether personal, family, business, or agricultural, the maximum is the greater of 12% per annum or 5% in excess of the Federal Reserve discount rate on 90-day commercial paper. A loan over $50,000 carries no statutory rate ceiling. The default rate absent a written contract rate is 9% 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.
A lender of a personal-use loan who wants to reserve the right to refuse early repayment or charge a prepayment penalty must include a specific bold or underlined notice in the loan agreement, or loses that right. Confirm the current required notice wording before relying on it.
Generally 6 years from a missed payment or the note's stated due date to sue to collect on a written promissory note, running from the breach itself.
A license is required only for a person who "conducts a business" making consumer finance loans of $50,000 or less, or acts as a broker or facilitator for one. An isolated private person-to-person promissory note does not trigger this requirement.
If a note is secured by personal property, the lender generally must file a UCC-1 financing statement with the Oregon Secretary of State to perfect and prioritize its security interest against other creditors. Renumbered from Section 79.0310 in 2025.
A confession-of-judgment authorization cannot be embedded in the original note itself; it requires a separate statement, signed and verified by the maker only after the debt is due, then filed with the court, and is barred outright for a loan for personal, family, or household purposes. Confirm the current rule before relying on it.
Oregon does not require a promissory note to be notarized or witnessed to be enforceable. Commercial Code Section 73.0104'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.
Frequently Asked Questions
For a loan of $50,000 or less, whether it's personal, family, business, or agricultural, Oregon caps interest at the greater of 12% per year or 5 percentage points over the Federal Reserve discount rate on 90-day commercial paper. A loan over $50,000 has no statutory rate ceiling at all; the maker and payee can agree in writing to any rate. Several categories of lender and loan, including banks, consumer finance and pawnbroker licensees, and loans secured by a first lien on real property, are exempt from the $50,000-or-less cap; confirm the current exemption list before relying on it.
No. Oregon Revised Statutes Section 73.0104, Oregon's version of Uniform Commercial Code Article 3, 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 Oregon's $50,000-or-less usury cap, if it applies), the repayment schedule, what counts as default, and the signatures of the maker and payee. Because a confession-of-judgment clause can't operate as part of the original note under Oregon Rule of Civil Procedure 73, confirm the current rule and leave it out; 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 Oregon Revised Statutes Section 73.0104: 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 with the Oregon Secretary of State 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 can't be used to skip that lawsuit for a personal, family, or household loan, and even for a business loan, Oregon Rule of Civil Procedure 73 requires a separate statement signed and verified only after the debt is already due, not a clause in the original note.
Generally 6 years from a missed payment or the note's stated due date, under Oregon's statute of limitations for actions on a written contract (Oregon Revised Statutes Section 12.080). Oregon courts have held this period runs from the breach itself, not from when the missed payment was discovered. 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 Oregon. An isolated private loan generally doesn't trigger Oregon Consumer Finance Act licensing, which by its own terms reaches a person who "conducts a business" making consumer finance loans of $50,000 or less, not an occasional loan between family members. The usury cap can still apply by loan size regardless of purpose, so confirm which side of the $50,000 line a given loan falls on.