South Dakota Demand Promissory Note Overview
A demand promissory note in South Dakota 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 South Dakota is No cap (deregulated).
No usury cap since 1980; rate governed by contract. Demand notes are commonly used in South Dakota for family loans, loans between friends, shareholder loans, and informal business financing where both parties want flexibility.
Regarding demand notice in South Dakota: No specific period; reasonable notice required. The statute of limitations for collecting on a promissory note in South Dakota is 6 years (oral and written), though the start date for demand notes can vary.
No cap (deregulated)
Usury rate cap
On Demand
No fixed maturity
6 years
Statute of limitations
30 Days
Recommended notice
South Dakota Legal Requirements
South Dakota has specific requirements for demand promissory notes:
Important: South Dakota Usury & Demand Rules
South Dakota's maximum interest rate is No cap (deregulated). 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 South Dakota's No cap (deregulated) usury cap
- Delivery Method: Specify how demand must be delivered (certified mail recommended)
- Governing Law: Specify South Dakota as the governing jurisdiction
Making a Demand in South Dakota
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 South Dakota 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 South Dakota
If the borrower fails to pay after a proper demand, the lender can pursue legal remedies in South Dakota.
| Aspect | South Dakota Rule |
|---|---|
| Usury Rate | No cap (deregulated) |
| 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 South Dakota Demand Promissory Note
Below is a preview of our South Dakota-specific demand promissory note template.
STATE OF SOUTH DAKOTA
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: [South Dakota Address]
BORROWER:
Name: [Borrower Name]
Address: [South Dakota Address]
TERMS
Interest: [Rate]% per annum (max No cap (deregulated) in SD)
Payable within 30 days of written demand by Lender
South Dakota Demand Promissory Note FAQ
Answers to common questions about demand promissory notes in South Dakota.
Official South Dakota Resources
Official resources for South Dakota lending laws and court procedures.
Other South Dakota Promissory Note Types
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