Texas Promissory Note PDF
Texas at a glance: Usury Limit: 18% per year (standard cap) · Notarization Required: No (recommended) · Governing Law: Tex. Fin. Code § 302.001
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Promissory Notes in Texas
Texas promissory notes are governed by the Texas Finance Code. Texas has a statutory usury ceiling of 18% per year for written agreements (Tex. Fin. Code § 302.001). Under specific market conditions, the legal ceiling can adjust up to 24% but defaults to 18% for standard contracts.
Charging interest above the statutory ceiling carries severe penalties in Texas, including forfeiture of all interest and potential liability for three times the amount of interest charged.
Texas Promissory Note — Quick Reference
| Requirement | Texas Rule |
|---|---|
| Usury Limit | 18% per year (standard cap) |
| Notarization Required | No (recommended) |
| Governing Law | Tex. Fin. Code § 302.001 |
| Late Fee Cap | Reasonable and contracted |
Texas Legal Requirements
- Interest rates cannot exceed 18% per year unless a specific statutory exception applies.
- If no interest rate is specified in a contract, the statutory rate defaults to 6% per year (Tex. Fin. Code § 302.002).
- Borrower must sign the note to confirm liability.
Texas Governing Laws
Read the full text of these laws at Cornell Law School's Texas legal resources or your state legislature's official website.