Free Hawaii Promissory Note Template

A Hawaii promissory note is a signed, written promise to repay money on stated terms. Hawaii supplies a 10% rate when a note fixes none, and it states its consumer ceiling by the month rather than the year.

Chapter 478 of the Hawaii Revised Statutes covers interest and usury. For a note, two sections carry most of the weight.

10% Without a Written Rate

Section 478-2 allows interest at ten per cent a year where no express written contract fixes a different rate. Meanwhile, it names the situations directly, including:

• Money due on a bond, bill, promissory note, or other instrument of writing, or money lent, after it becomes due
• Money due on the settlement of accounts, from the day the balance is ascertained
• Money received to the use of another, from the date a demand is made
• Money on an open account, after sixty days from the last item or transaction

The Written Ceiling

Section 478-4(a) reaches a consumer credit transaction, other than a credit card agreement, and a home business loan. For those, a written contract may stipulate simple interest up to one per cent per month, or twelve per cent a year. However, a financial institution regulated under chapter 412 may go higher. Apart from trust companies and credit unions, those lenders may stipulate two per cent a month, or twenty-four per cent a year.

The Finance Charge Alternative

Section 478-4(b) offers a second route. Rather than a simple interest rate, the parties may stipulate a finance charge in any form. The annual percentage rate can be no more than twelve per cent, or twenty-four per cent for those regulated institutions. Either way, charges that the federal Truth in Lending Act excludes from the finance charge sit outside that figure.

Money Owed by the State

Section 478-2 also treats state obligations separately. In that case, interest runs at the prime rate for each calendar quarter, but never above ten per cent a year. The section points to the prime rate posted in the Wall Street Journal on the first business day of the month before the quarter.

One per cent a month, for the loans § 478-4 covers. Annually, that is twelve per cent simple interest. It applies to consumer credit transactions other than credit card agreements, plus home business loans.

The higher figure belongs to institutions, not individuals. Only a financial institution regulated under chapter 412 may stipulate two per cent a month, or twenty-four per cent a year. Trust companies and credit unions are excluded from that allowance.

Because the statute speaks in months, writing a monthly rate keeps the comparison simple. So whichever form you choose, state it plainly and consistently in your Hawaii promissory note.

Tip: Fees can matter as much as the rate. If your note adds charges on top of interest, ask a Hawaii attorney how § 478-4(b) treats them before you sign.

As always, a few decisions come before the signatures. Work through these steps:

1. Identify what kind of loan it is, since § 478-4 speaks to consumer credit transactions and home business loans.
2. Choose a rate at or below one per cent a month for a covered loan.
3. Write the rate into the note, because without a written rate the 10% default applies once the money is due.
4. List any separate charges alongside 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.

Here too, the standard terms apply, stated carefully.

• Lender and borrower names and addresses
• Principal amount
• Interest rate, monthly or annual, in writing
• Any charges beyond interest
• Payment schedule and maturity date
• Late payment and default terms
• Collateral, if secured
• Signatures and dates

Start your Hawaii promissory note template with Document Genius’s step-by-step questionnaire, and have it ready to sign in minutes.