A New York promissory note is a document drafted to detail the manner in which a money lender will be repaid for a loan granted to an individual or business entity. When both parties agree to the loan amount, repayment deadlines, and the interest rate, they may both sign the document. If the borrower does not repay the loan within the agreed-upon timeframe, they may be met with late fees, additional interest, a lawsuit, or the lender may acquire any collateral put up as security.
If the lender charges more than the state-maximum sixteen (16) percent interest rate, they may face civil usury charges; if they exceed twenty-five (25) percent, they may face criminal usury charges.
Secured Promissory Note – This is a debt repayment agreement where the debtor’s assets secure the loan.
Unsecured Promissory Note – A financial document entailing repayment terms where a borrower is not obligated to pledge collateral.
- Interest & Usury Laws: Chapter 2 – Banking & Title 5 – Interest and Usury; Brokerage On Loans
- Usury Rate in General (Banking §14-A): 16%
- Usury Rate for Registered Broker/Dealer Debit Balances (§ 5-525): Prime rate on short-term business loans + 8% if the debit balance is payable on demand and secured.
- Usury Rate for Monetary Judgments (§ 5004): 9%