Free Arkansas Promissory Note

Learn About General Promissory Note in Arkansas

If you need financial assistance for a start-up, the lending institution may require you to sign a promissory note documenting the loan terms. On the hand, you could fill out a basic promissory note when lending money to your friend or business partner.

A promissory document for a personal loan or for repayment is, thus, a standalone contract outlining your legal obligations towards the loan payment. And in Arkansas, there are some basic details you should know about a promissory note, including the dos and the don’ts.

Read on for more about a promissory note in Arkansas.

Arkansas Promissory Note: What Does It Entail?

An Arkansas promissory note is a legal contract between the borrower and the lender. It is proof that the borrower received the loan from the lending party.

A generic promissory note must comply with the law in Arkansas to remain enforceable. As a result, Titles 4 and 6 of the Arkansas Code regulate the signing and enforcement of promissory notes.

Types of Arkansas Promissory Notes

Generally, there are two types of basic promissory notes for lending money:

Secured Promissory Note for borrowing money

You must provide valuable property as collateral when you enter a secured agreement. You may opt to include a car, home, jewelry, or other property as collateral for the loan. By implication, you grant the lender the legal right to possess the agreed collateral if you can’t pay the loan.

Typically, most lending institutions in Arkansas require a secured note unless you have a good credit standing. Once you clear the loan, the lending institution will issue a clearance statement relieving you from further obligations

Unsecured Promissory Note for lending money

An unsecured promissory note has a promise to pay the loan but doesn’t include a provision for collateral. Therefore, it is a risky agreement and most common among close friends and family members.

Maximum Interest Rate

In Arkansas, promissory notes include interest rates. However, the law allows parties to the contract to decide on an interest rate not exceeding the legal requirement. It all depends on the structure of the loan in question.

Generally, the maximum interest rate in Arkansas is 17%, and any rate above the maximum capped rate may render the document unenforceable.

Elements of a Commercial Promissory Note

A valid Arkansas promissory note includes all the legal clauses and elements as per the law. For instance, if you are entering in a secured agreement, you should have a security clause describing the collateral in your contract.

In addition, a valid commercial promissory note includes the following:

Definition of Terms

The section includes a list of the terms used in the agreement and their relevant meanings.

Interest Due

The section highlights how much interest the lender will pay in case of default. Regardless of the period of nonpayment, the interest shouldn’t exceed what the law requires.

Payment Allocation

Here, you’ll find information about how your payment will cover interest and principal balance.


Prepayment implies making your loan payment before the due date. The clause specifies if you’ll incur extra costs for paying the loan earlier. However, not all basic promissory notes in Arkansas will penalize you for prepayments.

Attorney’s Costs

Some lenders may require you to pay the legal costs if you default and the agreement proceeds to court for resolution. It would be best to read the clause to understand what it says about attorney's fees.


If you breach the loan payment terms, the lender may include an acceleration clause compelling you to clear the remaining balance.

Conflicting Terms

Sometimes, a formal promissory note may have conflicting terms. The clause, therefore, provides for an amendment to clarify the contradictory terms.

Waiver of Presentments

As a requirement, the lender shouldn’t be physically present if you wish to make payments on the formal promissory note. The clause, therefore, includes a waiver of the lender’s presence.

Governing Law

The agreement specifies which state will have the legal jurisdiction to enforce the promissory note. Do you wish to make a promissory note agreement in Arkansas?

Download a free printable sample promissory note from this website.