South Carolina Unsecured Promissory Note Overview
An unsecured promissory note in South Carolina 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 South Carolina is 8.75% (default).
8.75% default rate on judgments; no general usury cap for 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 South Carolina's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within South Carolina's statute of limitations (3 years (oral and written)). The small claims court limit in South Carolina is $7,500, which is ideal for smaller unsecured loans.
8.75% (default)
Usury rate cap
3 years
Statute of limitations
$7,500
Small claims limit
25%
Max garnishment
South Carolina Legal Requirements
South Carolina has specific requirements for unsecured promissory notes:
Important: South Carolina Usury Laws
South Carolina's maximum interest rate is 8.75% (default). 8.75% default rate on judgments; no general usury cap for 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 South Carolina's 8.75% (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 South Carolina law as the governing jurisdiction
Collection Remedies in South Carolina
If a borrower defaults on an unsecured promissory note in South Carolina, 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 ($7,500 limit)
Fast, affordable, no attorney required for amounts within the limit
File a Civil Lawsuit
For amounts above small claims limits, file in South Carolina civil court
Enforce the Judgment
Up to 25% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in South Carolina
The statute of limitations for collecting on a promissory note in South Carolina is 3 years (oral and written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | South Carolina Rule |
|---|---|
| Usury Rate | 8.75% (default) |
| Statute of Limitations | 3 years (oral and written) |
| Small Claims Limit | $7,500 |
| Garnishment Rules | Up to 25% of disposable earnings |
Sample South Carolina Unsecured Promissory Note
Below is a preview of our South Carolina-specific unsecured promissory note template.
STATE OF SOUTH CAROLINA
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [South Carolina Address]
BORROWER:
Name: [Borrower Name]
Address: [South Carolina Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 8.75% (default) in SC)
This note is UNSECURED. No collateral has been pledged.
South Carolina Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in South Carolina.
Official South Carolina Resources
Use these official resources for South Carolina lending laws and court procedures.
Other South Carolina Promissory Note Types
Need a different type of promissory note for South Carolina?
South Carolina Secured Promissory Note
Collateral-backed loan agreement
South Carolina Demand Promissory Note
Payable on demand, no fixed maturity
General Promissory Note
Standard promissory note template
South Carolina Loan Agreement
Comprehensive loan documentation
South Carolina Bill of Sale
Document property transfers
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