Arizona Secured Promissory Note Overview
A secured promissory note in Arizona is a loan agreement where the borrower pledges specific collateral to guarantee repayment. Arizona law governs the creation, perfection, and enforcement of security interests under the Uniform Commercial Code (UCC) as adopted by the state. The maximum interest rate for most loans in Arizona is No cap (deregulated).
Arizona has no usury cap for most loans; rate is governed by contract. Lenders should verify that the agreed-upon interest rate complies with Arizona's usury laws before finalizing the note. Charging interest above the legal limit can result in severe penalties, including forfeiture of interest and potential civil liability.
For secured notes involving real property in Arizona, non-judicial (deed of trust) foreclosure applies. Understanding your state's foreclosure process is critical because it determines the timeline, costs, and lender's rights in the event of borrower default.
No cap (deregulated)
Usury rate cap
Secretary of State
UCC filing office
Non-judicial
Foreclosure type
Limited
Deficiency judgment
Arizona Legal Requirements
Arizona has specific requirements for secured promissory notes. Here's what you need to ensure your note is enforceable under AZ law:
Important: Arizona Usury Laws
Arizona's maximum interest rate is No cap (deregulated). Arizona has no usury cap for most loans; rate is governed by contract. Exceeding the legal limit may void the interest portion of your note or result in civil penalties.
Essential Elements
- Written Agreement: The note must be in writing, signed by the borrower, and clearly state the loan terms
- Compliant Interest Rate: Must not exceed Arizona's No cap (deregulated) usury cap
- Collateral Description: Specific, identifiable description of all pledged property
- Security Agreement: Grant of security interest signed by the borrower (debtor)
- UCC-1 Filing: Filed with the Secretary of State, UCC Section for personal property collateral
- Default Provisions: Clear events of default, cure periods, and remedies including foreclosure/repossession rights
UCC Filing in Arizona
To perfect a security interest in personal property in Arizona, the lender must file a UCC-1 financing statement with the Secretary of State, UCC Section. This public filing puts other creditors on notice and establishes the lender's priority in the collateral.
Prepare the UCC-1 Form
Include the debtor's exact legal name, secured party name, and detailed collateral description
File with the Secretary of State
Submit online or by mail with the required filing fee
Monitor and Renew
UCC-1 filings last 5 years; file a continuation statement before expiration
Terminate After Payoff
File a UCC-3 termination statement when the loan is fully repaid
Arizona Foreclosure & Repossession
Arizona uses non-judicial (deed of trust) foreclosure for real property collateral. For personal property (vehicles, equipment, inventory), the lender generally has the right to repossess the collateral without court action, provided it can be done without breaching the peace.
Regarding deficiency judgments in Arizona: Limited; not allowed for residential property under 2.5 acres. The lender must follow Arizona's specific procedures for disposing of collateral in a commercially reasonable manner, providing proper notice to the borrower before any sale.
| Aspect | Arizona Rule |
|---|---|
| Foreclosure Type | Non-judicial (deed of trust) |
| Deficiency Judgment | Limited; not allowed for residential property under 2.5 acres |
| Statute of Limitations | 3 years (oral), 6 years (written) |
| Usury Rate | No cap (deregulated) |
| UCC Filing Office | Secretary of State, UCC Section |
Sample Arizona Secured Promissory Note
Below is a preview of our Arizona-specific secured promissory note. Your customized document will include all terms compliant with AZ law.
STATE OF ARIZONA
SECURED PROMISSORY NOTE
Collateral-Backed Loan Agreement
LENDER (Secured Party):
Name: [Lender Name]
Address: [Arizona Address]
BORROWER (Debtor):
Name: [Borrower Name]
Address: [Arizona Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max No cap (deregulated) in AZ)
Collateral: [Description]
Arizona Secured Promissory Note FAQ
Answers to common questions about secured promissory notes, UCC filings, and collateral requirements in Arizona.
Official Arizona Resources
Use these official resources to verify Arizona requirements, file UCC documents, and access state legal information.
Other Arizona Promissory Note Types
Need a different type of promissory note for Arizona? We offer state-specific templates for every type.
Create Your Arizona Secured Promissory Note
Answer a few questions and download your Arizona-compliant secured note in minutes.
No account required. Free to create and preview.