Wisconsin Unsecured Promissory Note Overview
An unsecured promissory note in Wisconsin 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 Wisconsin is 12% (default).
12% default rate; 5% max for certain non-business loans; no cap for business loans. Unsecured notes carry more risk for the lender, so interest rates are typically higher than secured notes. However, the rate must still comply with Wisconsin's usury laws.
If the borrower defaults, the lender's primary remedy is filing a lawsuit within Wisconsin's statute of limitations (6 years (oral and written)). The small claims court limit in Wisconsin is $10,000, which is ideal for smaller unsecured loans.
12% (default)
Usury rate cap
6 years
Statute of limitations
$10,000
Small claims limit
25%
Max garnishment
Wisconsin Legal Requirements
Wisconsin has specific requirements for unsecured promissory notes:
Important: Wisconsin Usury Laws
Wisconsin's maximum interest rate is 12% (default). 12% default rate; 5% max for certain non-business loans; no cap for business loans. 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 Wisconsin's 12% (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 Wisconsin law as the governing jurisdiction
Collection Remedies in Wisconsin
If a borrower defaults on an unsecured promissory note in Wisconsin, 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 Wisconsin civil court
Enforce the Judgment
Up to 20% of disposable earnings. Bank account levies and property liens also available
Statute of Limitations in Wisconsin
The statute of limitations for collecting on a promissory note in Wisconsin is 6 years (oral and written). After this period, the lender loses the right to file a lawsuit to enforce the note.
| Aspect | Wisconsin Rule |
|---|---|
| Usury Rate | 12% (default) |
| Statute of Limitations | 6 years (oral and written) |
| Small Claims Limit | $10,000 |
| Garnishment Rules | Up to 20% of disposable earnings |
Sample Wisconsin Unsecured Promissory Note
Below is a preview of our Wisconsin-specific unsecured promissory note template.
STATE OF WISCONSIN
UNSECURED PROMISSORY NOTE
No Collateral Loan Agreement
LENDER:
Name: [Lender Name]
Address: [Wisconsin Address]
BORROWER:
Name: [Borrower Name]
Address: [Wisconsin Address]
LOAN TERMS
Principal: $[Amount]
Interest: [Rate]% per annum (max 12% (default) in WI)
This note is UNSECURED. No collateral has been pledged.
Wisconsin Unsecured Promissory Note FAQ
Answers to common questions about unsecured promissory notes and collection procedures in Wisconsin.
Official Wisconsin Resources
Use these official resources for Wisconsin lending laws and court procedures.
Other Wisconsin Promissory Note Types
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