Virginia Unsecured Promissory Note Overview
An unsecured promissory note in Virginia 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 Virginia is 12%.
12% per annum maximum; no cap for business loans of $5,000 or more. Unsecured notes carry more risk for the lender, so interest rates are typically higher than secured notes. However, the rate must still comply with Virginia's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Virginia's statute of limitations (3 years (oral), 5 years (written)). The small claims court limit in Virginia is $5,000, which is ideal for smaller unsecured loans.
12%
Usury rate cap
3 years
Statute of limitations
$5,000
Small claims limit
25%
Max garnishment
Virginia Legal Requirements
Virginia has specific requirements for unsecured promissory notes:
Important: Virginia Usury Laws
Virginia's maximum interest rate is 12%. 12% per annum maximum; no cap for business loans of $5,000 or more. 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 Virginia'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 Virginia law as the governing jurisdiction
Collection Remedies in Virginia
If a borrower defaults on an unsecured promissory note in Virginia, 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 ($5,000 limit)
Fast, affordable, no attorney required for amounts within the limit
File a Civil Lawsuit
For amounts above small claims limits, file in Virginia civil court
Enforce the Judgment
Up to 25% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in Virginia
The statute of limitations for collecting on a promissory note in Virginia is 3 years (oral), 5 years (written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Virginia Rule |
|---|---|
| Usury Rate | 12% |
| Statute of Limitations | 3 years (oral), 5 years (written) |
| Small Claims Limit | $5,000 |
| Garnishment Rules | Up to 25% of disposable earnings |
Sample Virginia Unsecured Promissory Note
Below is a preview of our Virginia-specific unsecured promissory note template.
STATE OF VIRGINIA
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Virginia Address]
BORROWER:
Name: [Borrower Name]
Address: [Virginia Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 12% in VA)
This note is UNSECURED. No collateral has been pledged.
Virginia Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Virginia.
Official Virginia Resources
Use these official resources for Virginia lending laws and court procedures.
Other Virginia Promissory Note Types
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