Iowa Demand Promissory Note Overview
A demand promissory note in Iowa 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 Iowa is 5% (default).
5% default; contract rate limited to ~12% max. Demand notes are commonly used in Iowa for family loans, loans between friends, shareholder loans, and informal business financing where both parties want flexibility.
Regarding demand notice in Iowa: Reasonable notice required; no fixed period. The statute of limitations for collecting on a promissory note in Iowa is 5 years (oral), 10 years (written), though the start date for demand notes can vary.
5% (default)
Usury rate cap
On Demand
No fixed maturity
5 years
Statute of limitations
30 Days
Recommended notice
Iowa Legal Requirements
Iowa has specific requirements for demand promissory notes:
Important: Iowa Usury & Demand Rules
Iowa's maximum interest rate is 5% (default). Reasonable notice required; 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 Iowa's 5% (default) usury cap
- Delivery Method: Specify how demand must be delivered (certified mail recommended)
- Governing Law: Specify Iowa as the governing jurisdiction
Making a Demand in Iowa
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 Iowa 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 or district court
Collection Procedures in Iowa
If the borrower fails to pay after a proper demand, the lender can pursue legal remedies in Iowa.
| Aspect | Iowa Rule |
|---|---|
| Usury Rate | 5% (default) |
| Demand Notice | Reasonable notice required; no fixed period |
| Statute of Limitations | 5 years (oral), 10 years (written) |
| Collection Procedure | Demand letter, suit in small claims or district court |
Sample Iowa Demand Promissory Note
Below is a preview of our Iowa-specific demand promissory note template.
STATE OF IOWA
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: [Iowa Address]
BORROWER:
Name: [Borrower Name]
Address: [Iowa Address]
TERMS
Interest: [Rate]% per annum (max 5% (default) in IA)
Payable within 30 days of written demand by Lender
Iowa Demand Promissory Note FAQ
Answers to common questions about demand promissory notes in Iowa.
Official Iowa Resources
Official resources for Iowa lending laws and court procedures.
Other Iowa Promissory Note Types
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