Indiana Unsecured Promissory Note Overview
An unsecured promissory note in Indiana is a loan agreement where the borrower promises to repay without pledging any collateral. The lender relies on the borrower's creditworthiness and the legally enforceable promise to pay. The maximum interest rate in Indiana is No cap (deregulated).
No general usury cap; consumer lending governed by specific statutes. Unsecured notes carry more risk for the lender, so interest rates are typically higher than secured notes. However, the rate must still comply with Indiana's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Indiana's statute of limitations (6 years (oral), 10 years (written)). The small claims court limit in Indiana is $10,000, which is ideal for smaller unsecured loans.
No cap (deregulated)
Usury rate cap
6 years
Statute of limitations
$10,000
Small claims limit
25%
Max garnishment
Indiana Legal Requirements
Indiana has specific requirements for unsecured promissory notes:
Important: Indiana Usury Laws
Indiana's maximum interest rate is No cap (deregulated). No general usury cap; consumer lending governed by specific statutes. Exceeding this limit may void the interest or result in penalties.
- Written Agreement: Must be in writing, signed by borrower, clearly stating loan terms
- Compliant Interest Rate: Must not exceed Indiana's No cap (deregulated) usury cap
- No Collateral Statement: Explicitly state that the note is unsecured with no collateral pledged
- Default Provisions: Events of default, cure period, acceleration clause, and collection remedies
- Personal Guarantee: Recommended for business borrowers to protect the lender
- Governing Law: Specify Indiana law as the governing jurisdiction
Collection Remedies in Indiana
If a borrower defaults on an unsecured promissory note in Indiana, the lender has several collection options:
Send a Formal Demand Letter
Written notice demanding payment within a specified timeframe, creating a paper trail
File in Small Claims Court ($10,000 limit)
Fast, affordable, no attorney required for amounts within the limit
File a Civil Lawsuit
For amounts above small claims limits, file in Indiana civil court
Enforce the Judgment
Up to 25% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in Indiana
The statute of limitations for collecting on a promissory note in Indiana is 6 years (oral), 10 years (written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Indiana Rule |
|---|---|
| Usury Rate | No cap (deregulated) |
| Statute of Limitations | 6 years (oral), 10 years (written) |
| Small Claims Limit | $10,000 |
| Garnishment Rules | Up to 25% of disposable earnings |
Sample Indiana Unsecured Promissory Note
Below is a preview of our Indiana-specific unsecured promissory note template.
STATE OF INDIANA
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Indiana Address]
BORROWER:
Name: [Borrower Name]
Address: [Indiana Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max No cap (deregulated) in IN)
This note is UNSECURED. No collateral has been pledged.
Indiana Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Indiana.
Official Indiana Resources
Use these official resources for Indiana lending laws and court procedures.
Other Indiana Promissory Note Types
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