Illinois Demand Promissory Note Overview
A demand promissory note in Illinois is a flexible loan agreement where the lender can request full repayment at any time. There is no fixed maturity date — the loan remains outstanding until the lender makes a formal demand. The maximum interest rate in Illinois is 9%.
9% general cap; no limit for business loans over $5,000. Demand notes are commonly used in Illinois for family loans, loans between friends, shareholder loans, and informal business financing where both parties want flexibility.
Regarding demand notice in Illinois: Demand must be clear and unconditional; no fixed period. The statute of limitations for collecting on a promissory note in Illinois is 5 years (oral), 10 years (written), though the start date for demand notes can vary.
9%
Usury rate cap
On Demand
No fixed maturity
5 years
Statute of limitations
30 Days
Recommended notice
Illinois Legal Requirements
Illinois has specific requirements for demand promissory notes:
Important: Illinois Usury & Demand Rules
Illinois's maximum interest rate is 9%. Demand must be clear and unconditional; no fixed period. Specify a clear notice period in your note to avoid disputes.
- Written Agreement: Must be in writing and signed by the borrower
- Demand Clause: Clearly state the note is “payable on demand”
- Notice Period: Specify days borrower has to pay after written demand (30-90 days recommended)
- Compliant Interest Rate: Must not exceed Illinois's 9% usury cap
- Delivery Method: Specify how demand must be delivered (certified mail recommended)
- Governing Law: Specify Illinois as the governing jurisdiction
Making a Demand in Illinois
When the lender is ready to call in the loan, they must follow proper demand procedures:
Prepare the Demand Letter
State the total amount owed (principal + accrued interest), reference the original note, and specify the deadline for payment
Send via Certified Mail
Send the demand letter by certified mail with return receipt to prove delivery under Illinois law
Wait the Notice Period
Allow the borrower the full notice period specified in the note (or a reasonable time if not specified) to arrange payment
Pursue Collection if Unpaid
Demand letter, suit in small claims, circuit, or district court
Collection Procedures in Illinois
If the borrower fails to pay after a proper demand, the lender can pursue legal remedies in Illinois.
| Aspect | Illinois Rule |
|---|---|
| Usury Rate | 9% |
| Demand Notice | Demand must be clear and unconditional; no fixed period |
| Statute of Limitations | 5 years (oral), 10 years (written) |
| Collection Procedure | Demand letter, suit in small claims, circuit, or district court |
Sample Illinois Demand Promissory Note
Below is a preview of our Illinois-specific demand promissory note template.
STATE OF ILLINOIS
DEMAND PROMISSORY NOTE
Payable on Demand — No Fixed Maturity
FOR VALUE RECEIVED, the undersigned promises to pay ON DEMAND to the order of Lender the sum of $[Amount]
LENDER:
Name: [Lender Name]
Address: [Illinois Address]
BORROWER:
Name: [Borrower Name]
Address: [Illinois Address]
TERMS
Interest: [Rate]% per annum (max 9% in IL)
Payable within 30 days of written demand by Lender
Illinois Demand Promissory Note FAQ
Answers to common questions about demand promissory notes in Illinois.
Official Illinois Resources
Official resources for Illinois lending laws and court procedures.
Other Illinois Promissory Note Types
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