An Alaska promissory note is an agreement that contractually obligates a borrower to reimburse a lender for money loaned by a specific date. Promissory notes are often viewed as falling somewhere between an IOU and a loan agreement; it is a legal document that must be adhered to but it lacks the complexity and length of an official loan contract. While a loan agreement establishes specific default provisions, a promissory note does not. However, a lender is still within their legal right to file a lawsuit against a borrower if they breach the terms of a promissory note. A promissory note includes the amount of the loan, the interest rate, the due date, the installment plan, and any late fees.
- Interest & Usury Laws: Title 45, Chapter 45
- Usury Rate ($25,000+) (§ 45.45.010(a)): Over 10.5%
- Usury Rate ($25,000 or less) (§ 45.45.010(b)): Maximum is the greater of 10% OR 5% plus the annual rate of the Federal Reserve on the day the loan was made.
- Usury Rate for Small Business Loans (§ 45.81.210(a)): Over 75% of value of collateral.
- Usury Rate for Small Loans ($25,000 or less) (§ 06.20.230): Over 36% on $850 or less; over 24% on $850 – $10,000; or at a rate agreed by contract on more than $10,000 up to $25,000.
- Usury Rate for Credit Union Loans (§ 06.45.060(a)(5)(A)(vi)): Maximum is the greater of 15% or the rate specified in § 45.45.010(b).
- Usury Rate on Judgments (§ 09.30.070): Maximum is 3% above 12th Federal Reserve District discount rate or the contract rate.
Secured Promissory Note – Contains many of the same terms and conditions as the unsecured note, but differs in that the borrower is required to provide an asset to the lender at the start of the contract.
Unsecured Promissory Note – Does not require the borrower to provide the lender with an asset (such as a home or car) as collateral for the loan.