Virginia Secured Promissory Note Overview
A secured promissory note in Virginia is a loan agreement where the borrower pledges specific collateral to guarantee repayment. Virginia 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 Virginia is 12%.
12% per annum maximum for most loans; no cap for business loans of $5,000 or more; consumer finance rates regulated by statute. Lenders should verify that the agreed-upon interest rate complies with Virginia'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 Virginia, non-judicial (deed of trust, most common) 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
State Corporation Commission
UCC filing office
Non-judicial
Foreclosure type
Yes
Deficiency judgment
Virginia Legal Requirements
Virginia has specific requirements for secured promissory notes. Here's what you need to ensure your note is enforceable under VA law:
Important: Virginia Usury Laws
Virginia's maximum interest rate is 12%. 12% per annum maximum for most loans; no cap for business loans of $5,000 or more; consumer finance rates regulated by statute. 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 Virginia'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 State Corporation Commission, UCC Division for personal property collateral
- Default Provisions: Clear events of default, cure periods, and remedies including foreclosure/repossession rights
UCC Filing in Virginia
To perfect a security interest in personal property in Virginia, the lender must file a UCC-1 financing statement with the State Corporation Commission, 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 State Corporation Commission
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
Virginia Foreclosure & Repossession
Virginia uses non-judicial (deed of trust, most common) 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 Virginia: Yes, within 1 year of foreclosure (for non-judicial) or as part of the judicial proceeding. The lender must follow Virginia's specific procedures for disposing of collateral in a commercially reasonable manner, providing proper notice to the borrower before any sale.
| Aspect | Virginia Rule |
|---|---|
| Foreclosure Type | Non-judicial (deed of trust, most common) |
| Deficiency Judgment | Yes, within 1 year of foreclosure (for non-judicial) or as part of the judicial proceeding |
| Statute of Limitations | 3 years (oral), 5 years (written contracts) |
| Usury Rate | 12% |
| UCC Filing Office | State Corporation Commission, UCC Division |
Sample Virginia Secured Promissory Note
Below is a preview of our Virginia-specific secured promissory note. Your customized document will include all terms compliant with VA law.
STATE OF VIRGINIA
SECURED PROMISSORY NOTE
Collateral-Backed Loan Agreement
LENDER (Secured Party):
Name: [Lender Name]
Address: [Virginia Address]
BORROWER (Debtor):
Name: [Borrower Name]
Address: [Virginia Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 12% in VA)
Collateral: [Description]
Virginia Secured Promissory Note FAQ
Answers to common questions about secured promissory notes, UCC filings, and collateral requirements in Virginia.
Official Virginia Resources
Use these official resources to verify Virginia requirements, file UCC documents, and access state legal information.
Other Virginia Promissory Note Types
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