Utah Promissory Note
Utah promissory note template with no usury cap on an agreed lawful rate and a 6-year statute of limitations. Free template. Attorney review available.
Introduction
Most states that skip a percentage ceiling on interest still limit that freedom to a signed, written agreement. Utah goes further: under Utah Code Section 15-1-1, the maker and payee of a lawful contract, whether it is written, verbal, or even implied, may agree upon any rate of interest at all, with no statutory ceiling. Only if the contract is silent on rate does a default apply, and that default is a flat 10% per year. A promissory note is what puts that agreement in writing and makes it enforceable if the maker stops paying: 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 the template below is built around Utah's specific rules rather than a generic national form. A Utah note does not need to be notarized or witnessed to be enforceable. Confession-of-judgment clauses sit in a gray area here: Utah's judicial code generally authorizes a judgment by confession, but the Utah Consumer Credit Code separately bans a cognovit or confession-of-judgment clause for a creditor who regularly extends consumer credit for personal, family, or household purposes, so this template leaves the clause out. You generally have 6 years from a missed payment or the note's due date to sue to collect 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
Utah sets no statutory usury ceiling on the interest rate the maker and payee agree to in a lawful written, verbal, or implied contract; they may agree upon any rate. If the contract does not state a rate, the default legal rate is 10% per annum. (Utah Code Section 15-1-1)
- 3
Separately, Utah Code Section 76-6-520 makes it a third degree felony to knowingly engage in, or finance, "the business of making loans" at a rate higher than authorized by law. That criminal usury statute targets an unlicensed lending business operating above a rate ceiling set by a different, more specific licensing statute, not an isolated private note carrying a rate the parties lawfully agreed to under Section 15-1-1.
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A Utah promissory note does not need to be notarized or witnessed to be enforceable. Utah Code Section 70A-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.
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Confession-of-judgment clauses are in a mixed position in Utah. Utah Code Section 78B-5-205 generally authorizes a judgment by confession without a lawsuit, but Utah Code Section 70C-2-201 bans a cognovit or confession-of-judgment clause specifically for a "creditor" who regularly extends consumer credit for personal, family, or household purposes ("regularly" means more than 25 extensions of credit in the preceding calendar year, or more than 5 for a dwelling-secured transaction). Because that line depends on the specific lender's pattern of lending, don't rely on a confession-of-judgment clause in a general-purpose note.
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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 Utah. (Utah Code Section 78B-2-309)
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If a Utah promissory note is secured by personal property rather than real property, the lender generally needs to file a financing statement (UCC-1) to protect its priority against other creditors. (Utah Code Section 70A-9a-310)
Key decisions before you file
Before you file a Promissory Note in Utah, 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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Utah Requirements for Promissory Note
Utah sets no statutory ceiling on the rate a lawful written, verbal, or implied contract may state; the parties may agree upon any rate. Absent an express agreement on rate, the default legal rate is 10% 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.
Generally 6 years from a missed payment or the note's stated due date to sue to collect on a written promissory note.
Utah's judicial code generally authorizes a judgment by confession (Utah Code Section 78B-5-205), but a creditor who regularly extends consumer credit for personal, family, or household purposes may not take a cognovit or confession-of-judgment clause from a debtor. A promissory note intended for general use should not include a confession-of-judgment clause.
Knowingly engaging in, or financing, "the business of making loans" at a rate higher than authorized by law is a third degree felony. This targets an unlicensed lending business operating above a separate, more specific rate ceiling, not an isolated private note carrying a rate lawfully agreed to under Utah Code Section 15-1-1.
If a note is secured by personal property, the lender generally must file a financing statement (UCC-1) to perfect and prioritize its security interest against other creditors.
The Utah Consumer Credit Code's disclosure and other requirements apply only to a "creditor" who regularly extends consumer credit for personal, family, or household purposes (more than 25 extensions of credit in the preceding calendar year, or more than 5 for a dwelling-secured transaction). An isolated private person-to-person promissory note generally does not trigger these requirements.
Utah does not require a promissory note to be notarized or witnessed to be enforceable. Utah Code Section 70A-3-104'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
Utah sets no statutory usury ceiling on the interest rate the maker and payee agree to in a lawful written, verbal, or implied contract; they may agree upon any rate. If the contract doesn't state a rate, the default legal rate is 10% per annum. A separate criminal usury statute makes it a felony to run "the business of making loans" at a rate above what a different, more specific licensing law allows, but that targets unlicensed lending businesses, not an ordinary private note.
No. Utah Code Section 70A-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, the repayment schedule, what counts as default, and the signatures of the maker and payee. Because Utah bans a confession-of-judgment clause for a creditor who regularly extends consumer credit, and the general authorization statute doesn't clearly cover an occasional private note either, leave that clause out and rely 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 Utah Code Section 70A-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 financing statement (UCC-1) 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. Utah Code Section 78B-5-205 generally authorizes a judgment by confession, but Utah Code Section 70C-2-201 bans that clause for a creditor who regularly extends consumer credit for personal, family, or household purposes, so most notes should rely on a regular lawsuit rather than a confession-of-judgment clause.
Generally 6 years from a missed payment or the note's stated due date, under Utah's statute of limitations for actions on a written instrument (Utah Code Section 78B-2-309). 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 Utah. The Utah Consumer Credit Code's disclosure and cognovit-clause-ban rules generally apply only to a "creditor" who regularly extends consumer credit (more than 25 extensions of credit in a calendar year, or more than 5 for a dwelling-secured loan), so a typical one-off family or LLC loan usually falls outside those specific rules.