Louisiana Secured Promissory Note Overview
A secured promissory note in Louisiana is a loan agreement where the borrower pledges specific collateral to guarantee repayment. Louisiana 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 Louisiana is 12%.
12% per annum maximum by written agreement; default rate tied to judicial interest rate; special rules for consumer credit. Lenders should verify that the agreed-upon interest rate complies with Louisiana'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 Louisiana, judicial (executory proceeding) 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.
12%
Usury rate cap
Secretary of State
UCC filing office
Judicial
Foreclosure type
Yes
Deficiency judgment
Louisiana Legal Requirements
Louisiana has specific requirements for secured promissory notes. Here's what you need to ensure your note is enforceable under LA law:
Important: Louisiana Usury Laws
Louisiana's maximum interest rate is 12%. 12% per annum maximum by written agreement; default rate tied to judicial interest rate; special rules for consumer credit. 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 Louisiana's 12% 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 Division for personal property collateral
- Default Provisions: Clear events of default, cure periods, and remedies including foreclosure/repossession rights
UCC Filing in Louisiana
To perfect a security interest in personal property in Louisiana, the lender must file a UCC-1 financing statement with the Secretary of State, UCC Division. 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
Louisiana Foreclosure & Repossession
Louisiana uses judicial (executory proceeding) 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 Louisiana: Yes, but requires judicial appraisal. The lender must follow Louisiana's specific procedures for disposing of collateral in a commercially reasonable manner, providing proper notice to the borrower before any sale.
| Aspect | Louisiana Rule |
|---|---|
| Foreclosure Type | Judicial (executory proceeding) |
| Deficiency Judgment | Yes, but requires judicial appraisal |
| Statute of Limitations | 10 years (oral and written contracts) |
| Usury Rate | 12% |
| UCC Filing Office | Secretary of State, UCC Division |
Sample Louisiana Secured Promissory Note
Below is a preview of our Louisiana-specific secured promissory note. Your customized document will include all terms compliant with LA law.
STATE OF LOUISIANA
SECURED PROMISSORY NOTE
Collateral-Backed Loan Agreement
LENDER (Secured Party):
Name: [Lender Name]
Address: [Louisiana Address]
BORROWER (Debtor):
Name: [Borrower Name]
Address: [Louisiana Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 12% in LA)
Collateral: [Description]
Louisiana Secured Promissory Note FAQ
Answers to common questions about secured promissory notes, UCC filings, and collateral requirements in Louisiana.
Official Louisiana Resources
Use these official resources to verify Louisiana requirements, file UCC documents, and access state legal information.
Other Louisiana Promissory Note Types
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