New York Demand Promissory Note Overview
A demand promissory note in New York 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 New York is 16% civil / 25% criminal.
16% civil cap; 25% criminal usury; no cap for business loans over $2.5M. Demand notes are commonly used in New York for family loans, loans between friends, shareholder loans, and informal business financing where both parties want flexibility.
Regarding demand notice in New York: Demand must be clear and definite; no fixed period. The statute of limitations for collecting on a promissory note in New York is 6 years (oral and written), though the start date for demand notes can vary.
16% civil / 25% criminal
Usury rate cap
On Demand
No fixed maturity
6 years
Statute of limitations
30 Days
Recommended notice
New York Legal Requirements
New York has specific requirements for demand promissory notes:
Important: New York Usury & Demand Rules
New York's maximum interest rate is 16% civil / 25% criminal. Demand must be clear and definite; 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 New York's 16% civil / 25% criminal usury cap
- Delivery Method: Specify how demand must be delivered (certified mail recommended)
- Governing Law: Specify New York as the governing jurisdiction
Making a Demand in New York
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 New York 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, civil, or supreme court
Collection Procedures in New York
If the borrower fails to pay after a proper demand, the lender can pursue legal remedies in New York.
| Aspect | New York Rule |
|---|---|
| Usury Rate | 16% civil / 25% criminal |
| Demand Notice | Demand must be clear and definite; no fixed period |
| Statute of Limitations | 6 years (oral and written) |
| Collection Procedure | Demand letter, suit in small claims, civil, or supreme court |
Sample New York Demand Promissory Note
Below is a preview of our New York-specific demand promissory note template.
STATE OF NEW YORK
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: [New York Address]
BORROWER:
Name: [Borrower Name]
Address: [New York Address]
TERMS
Interest: [Rate]% per annum (max 16% civil / 25% criminal in NY)
Payable within 30 days of written demand by Lender
New York Demand Promissory Note FAQ
Answers to common questions about demand promissory notes in New York.
Official New York Resources
Official resources for New York lending laws and court procedures.
Other New York Promissory Note Types
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