New Mexico Unsecured Promissory Note Overview
An unsecured promissory note in New Mexico 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 New Mexico is 15%.
15% per annum maximum for most loans; higher rates for licensed small loan companies. Unsecured notes carry more risk for the lender, so interest rates are typically higher than secured notes. However, the rate must still comply with New Mexico's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within New Mexico's statute of limitations (4 years (oral), 6 years (written)). The small claims court limit in New Mexico is $10,000, which is ideal for smaller unsecured loans.
15%
Usury rate cap
4 years
Statute of limitations
$10,000
Small claims limit
25%
Max garnishment
New Mexico Legal Requirements
New Mexico has specific requirements for unsecured promissory notes:
Important: New Mexico Usury Laws
New Mexico's maximum interest rate is 15%. 15% per annum maximum for most loans; higher rates for licensed small loan companies. 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 New Mexico's 15% 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 New Mexico law as the governing jurisdiction
Collection Remedies in New Mexico
If a borrower defaults on an unsecured promissory note in New Mexico, 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 New Mexico civil court
Enforce the Judgment
Up to 25% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in New Mexico
The statute of limitations for collecting on a promissory note in New Mexico is 4 years (oral), 6 years (written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | New Mexico Rule |
|---|---|
| Usury Rate | 15% |
| Statute of Limitations | 4 years (oral), 6 years (written) |
| Small Claims Limit | $10,000 |
| Garnishment Rules | Up to 25% of disposable earnings |
Sample New Mexico Unsecured Promissory Note
Below is a preview of our New Mexico-specific unsecured promissory note template.
STATE OF NEW MEXICO
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [New Mexico Address]
BORROWER:
Name: [Borrower Name]
Address: [New Mexico Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 15% in NM)
This note is UNSECURED. No collateral has been pledged.
New Mexico Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in New Mexico.
Official New Mexico Resources
Use these official resources for New Mexico lending laws and court procedures.
Other New Mexico Promissory Note Types
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