Louisiana Unsecured Promissory Note Overview
An unsecured promissory note in Louisiana 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 Louisiana is 12%.
12% per annum maximum by written agreement; default rate tied to judicial interest rate. Unsecured notes carry more risk for the lender, so interest rates are typically higher than secured notes. However, the rate must still comply with Louisiana's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Louisiana's statute of limitations (10 years (oral and written)). The small claims court limit in Louisiana is $5,000, which is ideal for smaller unsecured loans.
12%
Usury rate cap
10 years
Statute of limitations
$5,000
Small claims limit
25%
Max garnishment
Louisiana Legal Requirements
Louisiana has specific requirements for unsecured promissory notes:
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. 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 Louisiana's 12% 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 Louisiana law as the governing jurisdiction
Collection Remedies in Louisiana
If a borrower defaults on an unsecured promissory note in Louisiana, 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 ($5,000 limit)
Fast, affordable, no attorney required for amounts within the limit
File a Civil Lawsuit
For amounts above small claims limits, file in Louisiana civil court
Enforce the Judgment
Up to 25% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in Louisiana
The statute of limitations for collecting on a promissory note in Louisiana is 10 years (oral and written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Louisiana Rule |
|---|---|
| Usury Rate | 12% |
| Statute of Limitations | 10 years (oral and written) |
| Small Claims Limit | $5,000 |
| Garnishment Rules | Up to 25% of disposable earnings |
Sample Louisiana Unsecured Promissory Note
Below is a preview of our Louisiana-specific unsecured promissory note template.
STATE OF LOUISIANA
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Louisiana Address]
BORROWER:
Name: [Borrower Name]
Address: [Louisiana Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 12% in LA)
This note is UNSECURED. No collateral has been pledged.
Louisiana Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Louisiana.
Official Louisiana Resources
Use these official resources for Louisiana lending laws and court procedures.
Other Louisiana Promissory Note Types
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