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. 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.
Secured Promissory Note – A loan repayment agreement whereby the borrower is required to pledge 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.
- Interest & Usury Laws: Title 45, Chapter 45
- Usury Rate With Contract (Under $25,000) (§ 45.45.010(b)): Maximum is the greater of 10% OR 5% plus the annual rate charged to member banks of the Federal Reserve on the day the loan was made.
- Usury Rate With Contract (Over $25,000) (§ 45.45.010(b)): No maximum.
- Usury Rate Without Contract (§ 45.45.010(a)): 10.5%
- Usury Rate for Small Business Loans (§ 45.81.210(a)): 75% of value of collateral.
- Usury Rate for Small Loans ($25,000 or less) (§ 06.20.230): 3% per month on $850 or less; 2% per month on $850 – $10,000; and at a rate agreed by contract on the remaining balance between $10,000-$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): 3% above Federal Reserve District discount rate (no maximum if the rate is established in a contract).