Free New Mexico Promissory Note Template

A New Mexico promissory note is a signed, written promise to repay money on set terms. The writing does the work here. Without a written contract fixing a rate, the law caps interest at fifteen percent a year.

Article 8 of Chapter 56 of the New Mexico Statutes covers money, interest, and usury. Two sections matter most for a note.

15% Without a Written Rate

Under § 56-8-3, a rate applies where no written contract fixes a different one. It may be no more than fifteen percent a year, and it applies in three situations:

• On money due by contract
• On money received to the use of another and retained without the owner’s consent, express or implied
• On money due on the settlement of matured accounts, from the day the balance is ascertained

So a note that says nothing about interest still carries a figure. Courts have treated that rate as available to a private lender where the contract is silent.

Interest After Judgment

Meanwhile, § 56-8-4(A) handles judgments. Interest runs from entry at eight and three-quarters percent a year. However, a judgment on a written contract that fixes a different rate carries the contract rate instead.

If the case involved tortious conduct, bad faith, or intentional or willful acts, the figure climbs to fifteen percent.

Prejudgment Interest

New Mexico courts treat § 56-8-3 as more than a default. Appellate decisions describe prejudgment interest under it as available as of right in some circumstances. That is worth knowing before a note goes unpaid, since it does not depend only on the court’s discretion.

The entire interest is forfeited. Section 56-8-13 covers taking, receiving, reserving, or charging a rate greater than the law allows. Where that is knowingly done, the whole interest the note carries is forfeited.

A borrower who already paid has a further remedy. They or their legal representatives may recover twice the interest paid by civil action. However, the action must start within two years of the usurious transaction.

The ceiling on a written rate is harder to state, because New Mexico’s usury provisions have changed over the years. So ask a New Mexico attorney before setting a rate well above the fifteen percent default.

Tip: Write the rate into the note as a number. That single step decides whether your New Mexico promissory note carries your figure or the statutory fifteen percent.

Put the rate in writing first. Follow these steps:

1. Agree the principal, the schedule, and an annual rate.
2. Write that rate into the note, since silence brings in the fifteen percent figure.
3. For anything unusually high, take legal advice before signing.
4. Set out what happens to interest after maturity or default.
5. Have the borrower and any cosigner sign, and date the note.
6. Give each party a copy, and keep a record of every payment.

Here too, the standard terms apply, with the rate stated plainly.

• Lender and borrower names and addresses
• Principal amount
• Annual interest rate, fixed in writing
• Payment schedule and maturity date
• Interest after maturity or default
• Late payment terms
• Collateral, if secured
• Signatures and dates

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