In Ohio, promissory notes are a legally binding agreement between a lender and a borrower. Promissory notes outline the terms of a loan, including the cost of the loan and the details for repayment.
Promissory notes are under the regulation of the Ohio Revised Code Title 13, Chapter 1301.
Ohio recognizes both secured and unsecured promissory notes.
Ohio Secured Promissory Note
A secured promissory note means that the borrower has provided a source of collateral in exchange for a loan. This collateral is usually of equal value to the money borrowed.
According to Chapter 1343 of the Ohio Revised Code, a lender is not allowed to apply an interest rate higher than 8% per annum.
You can download a free Ohio promissory note template online. They’re easy to fill out. All you need is some necessary information, such as:
- Date of contract
- Personal data of buyer and seller, including the address and legal name
- Amount of loan
- Interest rate
- Repayment terms, including frequency and amount
- Collateral offered as a security deposit
- Terms of the surrender of collateral if the contract becomes void
Ohio Unsecured Promissory Note
With unsecured promissory notes, the agreement occurs without the borrower having to come up with a down payment or collateral. These types of notes carry a higher risk for the lender, as there is no security to ensure the payoff of the debt.
Unsecured promissory notes are typically used among family members or friends, as there has to be a degree of trust between both parties with an unsecured promissory note.
You can download an unsecured free promissory note Ohio form online. All you need to do is fill in your information, much like you would with the secured promissory note without the collateral portion. Using a promissory note template saves you a ton of time.