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A Colorado promissory note is a type of debt agreement that establishes a borrower’s promise to repay money owed to a lender by a certain date. This arrangement often includes an interest rate added on top of the total amount owed by the borrower. In addition to the loan amount, interest rate, and date, a promissory note should include the names and addresses of both parties, how payments should be made (lump sum or installments), late fees, and collateral (if applicable).
A promissory note is less extensive than a loan agreement and does not usually include as many complex and loan-specific clauses. However, signing a promissory note is legally binding, and failure to adhere to the terms of the arrangement could result in a breach of contract lawsuit being filed against the borrower.
Types (2)
Secured Promissory Note – A debt repayment instrument secured by the borrower’s collateral.
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Unsecured Promissory Note – A debt repayment agreement where the borrower does not need collateral to secure a loan.
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Laws
- Interest & Usury Laws: Title 5, Articles 1-9 and Article 12
- Usury Rate With Agreement (§ 5-12-103): 45%
- Usury Rate Without Agreement (§ 5-12-101): 8%
- Usury Rate for Municipal Indebtedness (§ 5-12-104): 6%
- Usury Rate for Commercial Credit Plans (§ 5-12-107(2)(a)): 45%
- Usury Rate for Unsupervised Consumer Loan (§ 5-2-201(1)): 12%
- Usury Rate for Supervised Consumer Loan (§ 5-2-201(2)): 21% on the total loan OR 36% on $1,000 or less + 21% on $1,001-$3,000 + 15% above $3,000, whichever is greater.
- Usury Rate for Deferred Deposit/Payday Loan (§ 5-3.1-105): 36%
- Usury Rate for Judgment for Damages (§ 13-21-101(1)): 9%