Oregon Unsecured Promissory Note Overview
An unsecured promissory note in Oregon 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 Oregon is 12%.
12% per annum maximum or 5% above Federal Reserve discount rate; no cap for business loans over $50,000. Unsecured notes carry more risk for the lender, so interest rates are typically higher than secured notes. However, the rate must still comply with Oregon's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Oregon's statute of limitations (6 years (oral and written)). The small claims court limit in Oregon is $10,000, which is ideal for smaller unsecured loans.
12%
Usury rate cap
6 years
Statute of limitations
$10,000
Small claims limit
25%
Max garnishment
Oregon Legal Requirements
Oregon has specific requirements for unsecured promissory notes:
Important: Oregon Usury Laws
Oregon's maximum interest rate is 12%. 12% per annum maximum or 5% above Federal Reserve discount rate; no cap for business loans over $50,000. 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 Oregon'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 Oregon law as the governing jurisdiction
Collection Remedies in Oregon
If a borrower defaults on an unsecured promissory note in Oregon, 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 Oregon civil court
Enforce the Judgment
Up to 25% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in Oregon
The statute of limitations for collecting on a promissory note in Oregon is 6 years (oral and written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Oregon Rule |
|---|---|
| Usury Rate | 12% |
| Statute of Limitations | 6 years (oral and written) |
| Small Claims Limit | $10,000 |
| Garnishment Rules | Up to 25% of disposable earnings |
Sample Oregon Unsecured Promissory Note
Below is a preview of our Oregon-specific unsecured promissory note template.
STATE OF OREGON
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Oregon Address]
BORROWER:
Name: [Borrower Name]
Address: [Oregon Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 12% in OR)
This note is UNSECURED. No collateral has been pledged.
Oregon Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Oregon.
Official Oregon Resources
Use these official resources for Oregon lending laws and court procedures.
Other Oregon Promissory Note Types
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