Massachusetts Unsecured Promissory Note Overview
An unsecured promissory note in Massachusetts 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 Massachusetts is 20% (criminal usury).
6% default rate; 20% criminal usury cap; no specific civil limit for most written agreements. Unsecured notes carry more risk for the lender, so interest rates are typically higher than secured notes. However, the rate must still comply with Massachusetts's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Massachusetts's statute of limitations (6 years (oral and written)). The small claims court limit in Massachusetts is $7,000, which is ideal for smaller unsecured loans.
20% (criminal usury)
Usury rate cap
6 years
Statute of limitations
$7,000
Small claims limit
25%
Max garnishment
Massachusetts Legal Requirements
Massachusetts has specific requirements for unsecured promissory notes:
Important: Massachusetts Usury Laws
Massachusetts's maximum interest rate is 20% (criminal usury). 6% default rate; 20% criminal usury cap; no specific civil limit for most written agreements. 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 Massachusetts's 20% (criminal usury) 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 Massachusetts law as the governing jurisdiction
Collection Remedies in Massachusetts
If a borrower defaults on an unsecured promissory note in Massachusetts, 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 ($7,000 limit)
Fast, affordable, no attorney required for amounts within the limit
File a Civil Lawsuit
For amounts above small claims limits, file in Massachusetts civil court
Enforce the Judgment
Up to 15% of gross wages. Bank account levies and property liens also available
Statute of Limitations in Massachusetts
The statute of limitations for collecting on a promissory note in Massachusetts is 6 years (oral and written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Massachusetts Rule |
|---|---|
| Usury Rate | 20% (criminal usury) |
| Statute of Limitations | 6 years (oral and written) |
| Small Claims Limit | $7,000 |
| Garnishment Rules | Up to 15% of gross wages |
Sample Massachusetts Unsecured Promissory Note
Below is a preview of our Massachusetts-specific unsecured promissory note template.
STATE OF MASSACHUSETTS
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Massachusetts Address]
BORROWER:
Name: [Borrower Name]
Address: [Massachusetts Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 20% (criminal usury) in MA)
This note is UNSECURED. No collateral has been pledged.
Massachusetts Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Massachusetts.
Official Massachusetts Resources
Use these official resources for Massachusetts lending laws and court procedures.
Other Massachusetts Promissory Note Types
Need a different type of promissory note for Massachusetts?
Massachusetts Secured Promissory Note
Collateral-backed loan agreement
Massachusetts Demand Promissory Note
Payable on demand, no fixed maturity
General Promissory Note
Standard promissory note template
Massachusetts Loan Agreement
Comprehensive loan documentation
Massachusetts Bill of Sale
Document property transfers
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