Free Rhode Island Promissory Note

Rhode Island Promissory Note: Is It Legally Enforceable?

When lending money to a friend, you need assurance that they will refund you as agreed. Unfortunately, some debtors may fail to honor their word, subjecting you to a significant financial loss. The only way to avoid such disappointments is by signing a promissory note.

The agreement outlines your debtor’s legal obligations and ensures you recover your money if a dispute arises. It also acts as proof that you had a financial transaction in the first place.

Read on to understand the details about Rhode Island promissory note and whether it is legally enforceable.

Rhode Island Promissory Note: An Overview

A borrower promissory note in Rhode Island is a legal document between a borrower and lender concerning an existing loan.

The document, usually written, contains the terms of the agreement, including the principal amount, expected mode of payment and penalties for default. Through the agreement, the lender gains by receiving a specified sum, including accrued interest, over a given period.

Types of Promissory Notes

You can create a secured or unsecured note if you wish to assign a promissory note in Rhode Island.

A secured note allows the debtor to include collateral for the loan. Thus, if a dispute occurs owing to unpaid premiums, you can legally take the collateral to recover the due balance. Therefore, a secured note carries less risk since it guarantees payment.

On the other hand, an unsecured loan has no provision for collateral. You, therefore, have no legal rights to the debtor's property in case of unpaid disputes.

Instead, you can opt for alternative legal action by sharing the debtor's information with an accredited credit bureau. You could also seek the intervention of a small claims court. Due to the high risk of losing your money, unsecured notes are only ideal if you know the debtor personally or clearly understand their credit standing.

Rhode Island Usury Rates

A conditional promissory note in Rhode Island is subject to usury laws that define the maximum interest rate. According to Section 6-26-2 of the Rhode Island General Laws, you can only charge a maximum interest rate of 21%. Alternatively, you can charge 9% plus index of the domestic prime rate published in Money rates (From Wall Street Journal) on the last business day of the current month.

Is a Promissory Note Legally Enforceable?

A promissory note is a legal contract binding and enforceable in court. However, to enforce a promissory letter, it must contain legal duties and obligations for each party. In addition, it outlines the penalties for nonpayment of the loan.

The following elements define a legally promissory letter:


Rhode Island's valid promissory note contains a clearly marked title defining whether it is secured or unsecured. If you're writing a secure note, label the document as Secured Rhode Island Promissory Note.


The date of creating the contract appears below the title, following a defined format. When writing the date, begin with the month, followed by the day and the year. You’ll use the date to establish legal deadlines if a dispute arises.

Parties to the Contract

A valid agreement lists the legal names of the parties involved. Typically, the parties include the lender, borrower and cosigner (if applicable).

Mailing Addresses

You should write the mailing addresses of the lender and borrower, including their state and towns of residence. Moreover, for secured loans, including the physical address of the debtor for easy retrieval of the collateral.

The Principal Amount

A debtor promissory note in Rhode Island highlights the principal amount, excluding the accrued interest. Before signing the document, verify the principal amount is correct in US Dollars.

Annual Interest Rate

The annual interest rate is as agreed by both parties. However, the interest rate shouldn’t exceed what the usury laws require.

Payment Information

A valid promissory document explains how the debtor should pay the loan. Essential elements in the section include the number of installments, amount of each installment, due date, the penalty for late payment, and the lender’s payment address.


Both the borrower and cosigner should sign the document to confirm its validity.

Do you wish to assign a promissory note in Rhode Island? We can help you download and fill out a ready template without hiring an attorney. Please take advantage of a free template download from our website.