A Tennessee promissory note is a legal agreement between a lender and a borrower that outlines the conditions whereby money is lent to the borrower. Once it has been signed, the document gives the borrower security that they will be paid back with interest and on time. Interest rates cannot exceed state usury rates (see “Laws” below). In addition to paying interest, the borrower may be required to offer up their personal property as collateral for the loan to be transferred to the lender if the loan isn’t paid on time.
The completed promissory note will include the total sum lent, the date on which it was lent, the rate of interest, payment schedule, late fees (if applicable), and the contact information of both parties.
- Interest & Usury Laws: Chapter 14 – Interest Rates Generally, Chapter 15 – Interest On Home Loans
- Usury Rate (§ 47-14-103(3)): 10%
- Usury Rate for Small Single-Payment Loans (§ 47-14-104(a)(2)):
- Single-payment loans with a term of one (1) year or less and for an amount of one thousand dollars ($1,000) or less have a usury rate of 7.5% for the first one hundred dollars ($100) and an additional 1.5% on each subsequent one hundred dollars ($100) lent up to a maximum of rate of 20%.
- Usury Rate for Home Loans (§ 47-15-102(c)): 18%
Secured Promissory Note – A loan agreement whereby the borrower pledges an asset or personal property as collateral.