Pennsylvania Unsecured Promissory Note Overview
An unsecured promissory note in Pennsylvania 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 Pennsylvania is 6% (default).
6% default rate; no general usury cap 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 Pennsylvania's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Pennsylvania's statute of limitations (4 years (oral and written)). The small claims court limit in Pennsylvania is $12,000, which is ideal for smaller unsecured loans.
6% (default)
Usury rate cap
4 years
Statute of limitations
$12,000
Small claims limit
25%
Max garnishment
Pennsylvania Legal Requirements
Pennsylvania has specific requirements for unsecured promissory notes:
Important: Pennsylvania Usury Laws
Pennsylvania's maximum interest rate is 6% (default). 6% default rate; no general usury cap 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 Pennsylvania's 6% (default) 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 Pennsylvania law as the governing jurisdiction
Collection Remedies in Pennsylvania
If a borrower defaults on an unsecured promissory note in Pennsylvania, 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 ($12,000 limit)
Fast, affordable, no attorney required for amounts within the limit
File a Civil Lawsuit
For amounts above small claims limits, file in Pennsylvania civil court
Enforce the Judgment
Wages generally exempt except for child support, taxes, and student loans. Bank account levies and property liens also available
Statute of Limitations in Pennsylvania
The statute of limitations for collecting on a promissory note in Pennsylvania is 4 years (oral and written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Pennsylvania Rule |
|---|---|
| Usury Rate | 6% (default) |
| Statute of Limitations | 4 years (oral and written) |
| Small Claims Limit | $12,000 |
| Garnishment Rules | Wages generally exempt except for child support, taxes, and student loans |
Sample Pennsylvania Unsecured Promissory Note
Below is a preview of our Pennsylvania-specific unsecured promissory note template.
STATE OF PENNSYLVANIA
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Pennsylvania Address]
BORROWER:
Name: [Borrower Name]
Address: [Pennsylvania Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 6% (default) in PA)
This note is UNSECURED. No collateral has been pledged.
Pennsylvania Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Pennsylvania.
Official Pennsylvania Resources
Use these official resources for Pennsylvania lending laws and court procedures.
Other Pennsylvania Promissory Note Types
Need a different type of promissory note for Pennsylvania?
Pennsylvania Secured Promissory Note
Collateral-backed loan agreement
Pennsylvania Demand Promissory Note
Payable on demand, no fixed maturity
General Promissory Note
Standard promissory note template
Pennsylvania Loan Agreement
Comprehensive loan documentation
Pennsylvania Bill of Sale
Document property transfers
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