Texas Demand promissory note
Set out how the holder makes a demand, when payment becomes due and how the borrower will receive notice. Retain payment and demand records.
Before you prepare the document
Identify each borrower and holder, the original debt and funding dates, funds actually received, payment records, interest and other charges. Confirm any collateral and any existing obligation it continues to secure. Omit personal account numbers from the document.
Interest, security and location
Texas interest and prepayment. Ordinary interest is generally capped at 10% unless another law authorizes it. A written contract can use a dated weekly ceiling. For example, the published household and commercial weekly ceilings were both 18% on May 15, 2026. The statutory limits and publication period matter. Check the agreement or renewal date and distinguish a fixed household loan from a variable commercial loan. A Texas loan on property that is or will be the borrower’s residential homestead can collect a prepayment charge above 12% interest only if a federal agency requires that charge. A contract silent on interest and an express zero-interest agreement are different. Texas Credit Letter and rate archive · Texas Finance Code §302.102
Texas real-property security. A promissory note alone does not create a land lien. Identify the separate property instrument, the owners and any required spouse consent. For a homestead, trace original purchase money to the price. A later cash-out advance is a different category, with lender eligibility, lien-to-value, enforcement and other requirements. Only a lawful real-property process can transfer possession of land. Texas Constitution, Article XVI, Section 50 · Property Code §51.002
Texas motor vehicle liens. Check the jurisdiction covering the vehicle by title, the owner and how the vehicle is used. A Texas choice-of-law clause does not establish that there is a Texas title. For a Texas-titled private vehicle, use the title record to perfect the lien. A selling dealer’s own grant in qualifying inventory uses Article 9. Compare the actual secured obligation and balance tender before releasing a title. Texas title application · Texas lien release form · Texas Transportation Code
When the parties, collateral, loan negotiation or repayment involve different states, record each location and determine the applicable requirements before signing. Verify the filed instrument and applicable filing law separately from any law chosen for the note.
Borrower protections
Pre-service debt can qualify for the Servicemembers Civil Relief Act interest reduction. A covered mortgage can qualify for an additional year. The Military Lending Act separately considers credit extended to covered servicemembers and dependents. Verify applicable federal disclosures before consummation. 50 U.S.C. §3937 · CFPB Military Lending Act guidance
Choose a repayment structure
Questions about funding and payment
Can I prepare a note before funding?
Choose the planning worksheet while a transfer is pending. Reconcile the actual net principal with the dated payment record before acknowledging receipt.
What happens after a partial payment?
Record how the holder applied the payment and what balance remains. Identify any agreed release of specific collateral. Check the applicable filing or title procedure separately.