Utah Unsecured Promissory Note Overview
An unsecured promissory note in Utah 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 Utah is 10% (default).
10% default rate; 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 Utah's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Utah's statute of limitations (4 years (oral), 6 years (written)). The small claims court limit in Utah is $11,000, which is ideal for smaller unsecured loans.
10% (default)
Usury rate cap
4 years
Statute of limitations
$11,000
Small claims limit
25%
Max garnishment
Utah Legal Requirements
Utah has specific requirements for unsecured promissory notes:
Important: Utah Usury Laws
Utah's maximum interest rate is 10% (default). 10% default rate; 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 Utah's 10% (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 Utah law as the governing jurisdiction
Collection Remedies in Utah
If a borrower defaults on an unsecured promissory note in Utah, 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 ($11,000 limit)
Fast, affordable, no attorney required for amounts within the limit
File a Civil Lawsuit
For amounts above small claims limits, file in Utah civil court
Enforce the Judgment
Up to 25% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in Utah
The statute of limitations for collecting on a promissory note in Utah is 4 years (oral), 6 years (written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Utah Rule |
|---|---|
| Usury Rate | 10% (default) |
| Statute of Limitations | 4 years (oral), 6 years (written) |
| Small Claims Limit | $11,000 |
| Garnishment Rules | Up to 25% of disposable earnings |
Sample Utah Unsecured Promissory Note
Below is a preview of our Utah-specific unsecured promissory note template.
STATE OF UTAH
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Utah Address]
BORROWER:
Name: [Borrower Name]
Address: [Utah Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 10% (default) in UT)
This note is UNSECURED. No collateral has been pledged.
Utah Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Utah.
Official Utah Resources
Use these official resources for Utah lending laws and court procedures.
Other Utah Promissory Note Types
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