Oregon 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

   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. 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. 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. 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. 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. 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)

Oregon Requirements for Promissory Note

• Maximum Legal Interest Rate (Oregon Revised Statutes Section 82.010)

  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.

• Negotiability Requirements (Oregon Revised Statutes Section 73.0104)

  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.

• Prepayment Penalty Notice Requirement (Oregon Revised Statutes Sections 82.160, 82.170)

  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.

• Statute of Limitations (ORS 12.080)

  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.

• Oregon Consumer Finance Act License Scope (Oregon Revised Statutes Section 725.045)

  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.

• Secured Transaction Filing (Oregon Revised Statutes Section 79A.3100)

  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.

• Confession of Judgment Restricted (Oregon Rule of Civil Procedure 73)

  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.

• Notarization Not Required for Validity (Oregon Revised Statutes Section 73.0104)

  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.