Hawaii Secured Promissory Note Overview
A secured promissory note in Hawaii is a loan agreement where the borrower pledges specific collateral to guarantee repayment. Hawaii 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 Hawaii is 10%.
10% per annum maximum; no limit for first mortgages from licensed lenders. Lenders should verify that the agreed-upon interest rate complies with Hawaii'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 Hawaii, judicial and non-judicial (power of sale) 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.
10%
Usury rate cap
Bureau of Conveyances
UCC filing office
Judicial and non-judicial
Foreclosure type
Yes (judicial foreclosure)
Deficiency judgment
Hawaii Legal Requirements
Hawaii has specific requirements for secured promissory notes. Here's what you need to ensure your note is enforceable under HI law:
Important: Hawaii Usury Laws
Hawaii's maximum interest rate is 10%. 10% per annum maximum; no limit for first mortgages from licensed lenders. 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 Hawaii's 10% 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 Bureau of Conveyances, UCC Section for personal property collateral
- Default Provisions: Clear events of default, cure periods, and remedies including foreclosure/repossession rights
UCC Filing in Hawaii
To perfect a security interest in personal property in Hawaii, the lender must file a UCC-1 financing statement with the Bureau of Conveyances, 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 Bureau of Conveyances
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
Hawaii Foreclosure & Repossession
Hawaii uses judicial and non-judicial (power of sale) 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 Hawaii: Yes (judicial foreclosure); No (non-judicial). The lender must follow Hawaii's specific procedures for disposing of collateral in a commercially reasonable manner, providing proper notice to the borrower before any sale.
| Aspect | Hawaii Rule |
|---|---|
| Foreclosure Type | Judicial and non-judicial (power of sale) |
| Deficiency Judgment | Yes (judicial foreclosure); No (non-judicial) |
| Statute of Limitations | 6 years (oral and written contracts) |
| Usury Rate | 10% |
| UCC Filing Office | Bureau of Conveyances, UCC Section |
Sample Hawaii Secured Promissory Note
Below is a preview of our Hawaii-specific secured promissory note. Your customized document will include all terms compliant with HI law.
STATE OF HAWAII
SECURED PROMISSORY NOTE
Collateral-Backed Loan Agreement
LENDER (Secured Party):
Name: [Lender Name]
Address: [Hawaii Address]
BORROWER (Debtor):
Name: [Borrower Name]
Address: [Hawaii Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 10% in HI)
Collateral: [Description]
Hawaii Secured Promissory Note FAQ
Answers to common questions about secured promissory notes, UCC filings, and collateral requirements in Hawaii.
Official Hawaii Resources
Use these official resources to verify Hawaii requirements, file UCC documents, and access state legal information.
Other Hawaii Promissory Note Types
Need a different type of promissory note for Hawaii? We offer state-specific templates for every type.
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