Free Arkansas Promissory Note Template

An Arkansas promissory note is a signed, written promise to repay money on agreed terms. Arkansas caps the interest on most private loans in its state constitution, so the rate you write down matters a great deal.

Voters adopted Amendment 89 to the state constitution at the 2010 general election, and it took effect on January 1, 2011. It repealed the old interest provision in Article 19, Section 13.

A 17% Ceiling on Most Loans

Section 3 of Amendment 89 sets the maximum lawful rate on loans and contracts at 17% a year. It reaches every loan or contract not described in Sections 1 and 2.

Loans the Ceiling Doesn’t Cover

Two groups fall outside Section 3:

• Governmental units — Section 1 removes the maximum rate on bonds issued by, and loans made by or to, the state and its political subdivisions
• Federally insured depository institutions with a main office in Arkansas — Section 2 ties their maximum to the rate that applied under federal law, 12 U.S.C. § 1831u, on March 1, 2009

What Happens Above 17%

Under Section 6(2), a contract under Section 3 with a rate above the maximum is void as to both principal and interest. The same subsection directs the General Assembly to prohibit such contracts by law.

Federal Law and Timing

Section 6(1) says the amendment doesn’t override federal law on loans or interest rates, including loans secured by residential real property. Meanwhile, Section 12 applies the amendment to loans made after its effective date.

For most private loans, an Arkansas promissory note can carry up to 17% a year. That includes a loan between relatives, friends, or two businesses. The exceptions are loans from a governmental unit or an Arkansas-based federally insured depository institution.

Here, the stakes are unusually high. Because Section 6(2) voids an over-limit contract as to principal as well as interest, leave a clear margin below 17%.

Also note that Section 11 lets the General Assembly amend these provisions by a three-fourths vote of each house. For that reason, confirm the current text before you sign.

Tip: Amendment 89 doesn’t define what counts as interest. If your note adds fees, points, or other charges, ask an Arkansas attorney whether they count toward the 17% limit.

A few checks before signing keep the note within the limit. Work through these steps:

1. Confirm what kind of lender is involved: a private person or business, a governmental unit, or an Arkansas-based federally insured depository institution.
2. For a private loan, choose an annual rate below 17%, and write it into the note.
3. List any fees or charges, so both parties see the full cost.
4. If a home secures the loan, ask an attorney whether federal law affects the rate.
5. Date the note, and have the borrower and any cosigner sign.
6. Give each party a copy, and keep the original somewhere safe.

Most terms match any note. Even so, the rate and the lender details deserve the closest attention in Arkansas.

• Borrower and lender names and addresses
• Lender type, if it’s a bank or public body
• Principal amount
• Annual interest rate
• Any fees or other charges
• Payment schedule and due date
• Late payment and default terms
• Signatures and dates

Document Genius’s step-by-step questionnaire walks you through each term, so your Arkansas promissory note template is ready to download or e-sign in minutes.