Ohio Promissory Note Templates

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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.

Frequently Asked Questions

To enforce a secured promissory note in Ohio, the lender can contact the borrower to arrange for forfeiture of the collateral’s assets. Or they can hire someone to do it for them. But with unsecured promissory notes, the only thing you can do is take the borrower to small claims court, within the appropriate statute of limitations.

In Ohio, promissory notes have a statute of limitations of six years. If there is a breach of contract within six years of the promissory letter, the lender has a legal right to enforce the note. But after six years, the promissory letter is no longer relevant. Most courts will turn down a judgment after this time.

In Ohio, the usury rate controls how much interest you have to pay back when you take out a loan. State regulations have it set that no lender is allowed to charge more than 8% per year. Both parties should agree on the usury rate before signing. And it should be written in that the rate cannot fluctuate with time or the value of money.

The lender must file an appeal in the court system of their county of residence to collect on a promissory note in Ohio. If you are dealing with a secured promissory note, you can attempt to collect the debt on your own or hire a professional service to collect for you.