Arkansas Promissory Note Templates

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An Arkansas promissory note is a legally binding contract between two parties, a lender and a borrower.

Its purpose is to outline the details of a loan and act as proof of the existence of that loan. A promissory note typically includes information about pertinent loan details, such as interest rates, payment dates, and how payments will be made. They should also include clauses that further define the loan, such as attorney fees, severability, and prepayment.

Promissory notes must comply with Arkansas law to be considered valid. Arkansas Code Title 4 regulates promissory notes related to business or commercial law, for example. Promissory notes related to higher education fall under Arkansas Code Title 6.

There are two types of Arkansas promissory notes: secured and unsecured.

Arkansas Secured Promissory Note

To enter into a secured loan, the borrower must provide some form of collateral. Common types of collateral include cars, homes, or other items of value. In the event of nonpayment, the lender can legally take possession of the agreed-upon collateral to recover the loan’s cost.

Most financial institutions require secured loans unless the borrower has outstanding credit or high net worth.

Once the loan is repaid in full, the lender must provide the borrower with a written statement relieving them of any further payment obligations.

Arkansas Unsecured Promissory Note

An unsecured promissory note has no form of collateral backing it, which makes it a more risky loan for a lender. As such, it’s more common among family members and close friends.

Should the borrower default on their payments, the lender must resort to taking the borrower to small claims court (if the total amount remaining is less than $10,000). They can also report the nonpayment to a credit agency.


For a promissory note Arkansas form to be binding, both parties must sign and date the form. Any co-signers must also sign and date the form. Signing the promissory note with a notary is not required, though it can help answer questions about the form’s legitimacy in the case of a dispute.

Should the borrower default on the loan, the lender can take the borrower to small claims court. They can also contact a collection agency to recover the cost owed.

A master promissory note consolidates multiple loans. The most common example of an MPN is in the case of student loans.

Promissory notes typically include interest, and the amount of interest that can be applied depends on the loan structure. Applying too much interest on a promissory note is illegal, and doing so can render your contract illegal. The maximum usury rate in Arkansas is 17%, which is set forth by theArkansas Constitution.