Michigan Demand Promissory Note Overview
A demand promissory note in Michigan 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 Michigan is 7% (default).
7% default; 25% criminal usury. Demand notes are commonly used in Michigan for family loans, loans between friends, shareholder loans, and informal business financing where both parties want flexibility.
Regarding demand notice in Michigan: No specific period; reasonable notice required. The statute of limitations for collecting on a promissory note in Michigan is 6 years (oral and written), though the start date for demand notes can vary.
7% (default)
Usury rate cap
On Demand
No fixed maturity
6 years
Statute of limitations
30 Days
Recommended notice
Michigan Legal Requirements
Michigan has specific requirements for demand promissory notes:
Important: Michigan Usury & Demand Rules
Michigan's maximum interest rate is 7% (default). No specific period; reasonable notice required. 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 Michigan's 7% (default) usury cap
- Delivery Method: Specify how demand must be delivered (certified mail recommended)
- Governing Law: Specify Michigan as the governing jurisdiction
Making a Demand in Michigan
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 Michigan 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 circuit court
Collection Procedures in Michigan
If the borrower fails to pay after a proper demand, the lender can pursue legal remedies in Michigan.
| Aspect | Michigan Rule |
|---|---|
| Usury Rate | 7% (default) |
| Demand Notice | No specific period; reasonable notice required |
| Statute of Limitations | 6 years (oral and written) |
| Collection Procedure | Demand letter, suit in small claims or circuit court |
Sample Michigan Demand Promissory Note
Below is a preview of our Michigan-specific demand promissory note template.
STATE OF MICHIGAN
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: [Michigan Address]
BORROWER:
Name: [Borrower Name]
Address: [Michigan Address]
TERMS
Interest: [Rate]% per annum (max 7% (default) in MI)
Payable within 30 days of written demand by Lender
Michigan Demand Promissory Note FAQ
Answers to common questions about demand promissory notes in Michigan.
Official Michigan Resources
Official resources for Michigan lending laws and court procedures.
Other Michigan Promissory Note Types
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