Free South Dakota Promissory Note

South Dakota Promissory Note: Is It Worth Considering?

Did you know that you can take a bank loan even when you don’t have a high credit rating for a commercial loan? All you require is to sign a promissory note to guide your lending agreement with the creditor.

Promissory notes undoubtedly offer a convenient way to obtain credit. They have flexible repayment periods and negotiated terms that make them an alternative to commercial loans. However, like other contracts, a promissory note comes with legal obligations and penalties for nonpayment, which you should know.

Here, we’ll look at a promissory note in South Dakota and its benefits.

Promissory Note in South Dakota

A South Dakota promissory note is a legal contract between the lender and borrower, documenting the existence of the loan and how the borrower will settle it.

The borrower, in the contract, promises to reimburse the creditor a specified sum within the duration prescribed. On the other hand, the lender benefits from the contract by receiving the loan balance and the accrued interest.

A Promissory note in South Dakota comes in two forms:

South Dakota Secured Note

A secured promissory letter allows the borrower to include a valuable item as collateral for the loan. The lender reserves the right to own the property if the borrower defaults on the loan agreement. Common items set aside as collateral include a car, house, watercraft or jewelry.

South Dakota Unsecured Note

An unsecured promissory note doesn’t include collateral for the loan. Instead, the lender only has the borrower’s signature to confirm the document’s validity.

If the borrower defaults on the loan agreement, the lender can’t claim any property to clear the balance. Despite this limitation, a lender can file a legal suit in court to compel the borrower to clear the loan.

What’s the Maximum Interest Rate in South Dakota?

The interest rates in South Dakota are subject to South Dakota Statutes Sections 54-3-16 and 54-3-4. Under the statutes, you’re free to set an agreed interest rate in writing. However, if there’s no written agreement, the interest rate shouldn’t exceed 15% per year, whereas the legal maximum rate remains 12%.

Benefits of a Promissory Note

Most people often wonder whether a promissory note offers any valuable perk. But unlike a conventional loan, a promissory note is one of the cheapest options for lending and borrowing. Assigning a South Dakota promissory note guarantees the following:

Flexibility of Payment

A promissory note is one of the most flexible borrowing options because parties to the contract can choose the most convenient payment method. You can pay monthly installments, lump-sum payments or balloon payments. Flexibility also allows you to select only the loan repayment terms that best suit your individual needs.


A promissory note is pretty simple. Unlike conventional loans, you don't need to write many pages or fill out lengthy information. This means you won't incur substantial legal costs in preparing the document. In South Dakota, you don't need to notarize your agreement either.

Convenient Lending Option

A promissory note offers a convenient way of borrowing money. For instance, you don’t require any collateral when you take an unsecured loan from a friend. Similarly, your friend may not need you to have a substantial credit rating to give you the loan.

A promissory note offers a flexible and convenient way to obtain a loan. If you need a promissory letter template in South Dakota, you don’t need to go through the lengthy queues at an attorney’s office. You can simply download a free PDF sample of the South Dakota promissory note from our website.