Colorado Promissory Note Template [PDF + Download]

A promissory note in Colorado is a legal document that outlines the borrower's promise to repay the loan amount owed to the lender. It documents the terms of a loan agreement in Colorado, including details such as the loan amount, interest rate, due date, and payment methods.

To better understand the meaning of a promissory note, it's essential to recognize its role in formalizing a loan. This document provides clarity and protection for both parties, specifying the borrower's repayment obligations and the lender's rights in the event of default.

Types of Promissory Notes in Colorado

Promissory notes in Colorado are categorized based on the level of security they provide. The two main types are unsecured and secured promissory notes.

Unsecured Promissory Note

An unsecured promissory note is a standard agreement where the borrower promises to repay the lender as outlined in the document. However, this type of note does not involve any collateral. If the borrower fails to repay under the agreed terms, the lender can pursue legal action but has no guarantee of repayment since no assets secure the debt.

Secured Promissory Note

A secured promissory note includes the borrower's promise to pay but is additionally backed by collateral—an asset belonging to the borrower. This collateral serves as security for the repayment. So, if the borrower defaults, the lender can claim or sell the asset to recover the owed amount, which provides a stronger guarantee of repayment.

Signing Requirements for Promissory Notes in Colorado

The Colorado promissory note requirements include specific elements that ensure the document is legally valid and enforceable. While promissory note templates can simplify the creation process, the note has to be tailored to reflect the unique details of the agreements. Now, let's see what the promissory note requirements in Colorado are:

Signing Requirements

The promissory note must be documented in writing.
It should clearly state the lender's and borrower’s names, addresses, and identification details.
The document must outline the terms of the Colorado debt agreement, including the loan amount, payment method, due date, and applicable interest rate.
Both parties must sign the document for it to be enforceable.

For added legal security, consider having the note witnessed or notarized by a notary public. Additionally, reviewing a promissory note sample ensures all necessary details are included and correct.

Statutory Considerations for Colorado Promissory Notes

Colorado Revised Statutes govern the interest rate and terms for promissory notes, ensuring fairness and compliance with state regulations. Key statutory considerations include:

Type of Loan	Interest Rate	Relevant Law
Without a Contract	8% per annum	Sec. 5-12-101
Municipal Indebtedness	6% per annum	Sec. 5-12-104
Commercial Credit Plans	Not more than 45% per annum	Sec. 5-12-107(2)(a)
Unsupervised Consumer Loan	Not to exceed 12% per year	Sec. 5-2-201(1)
Supervised Consumer Loan	21% on amounts over $3,000 up to 36%	Sec. 5-2-201(2)
Deferred Deposit/Payday Loan	36%	Sec. 5-3.1-105
Judgment for Damages	9% per annum	Sec. 13-21-101(1)

Promissory notes in Colorado can be used for both personal and business loans, but they must adhere to these interest rate caps and usury laws to remain valid. If the parties agree to an interest rate higher than the legal limit, the agreement could be deemed usurious and unenforceable, with the borrower potentially not being required to pay the excess interest.

How to Enforce a Promissory Note in Colorado

To enforce a promissory note in Colorado, the lender must take specific steps when the borrower defaults. First, the lender can file a lawsuit to prove that the note is valid, the borrower failed to repay, and a balance remains due.

If the debt is $7,500 or less, filing a claim in Colorado small claims court is a quicker and more affordable option. For larger debts, pursuing a formal court judgment is necessary.

For a secured promissory note, the lender can foreclose on the collateral to recover the debt. For unsecured notes, a court judgment allows collection methods like wage garnishments or asset lines.

Under Section 13-80-103.5 of the Colorado Revised Statutes, lenders have six years to take action on an enforceable promissory note in Colorado before the statute of limitations expires. Acting promptly ensures that the debt can still be recovered.

How Can a Promissory Note in Colorado Be Changed or Revoked?

A promissory note in Colorado can be changed or revoked if both the borrower and lender agree to the changes. Mutual agreement is key—neither party can alter the terms alone. For example, the repayment schedule, loan amount, or interest rate can be modified if both sides consent.

To ensure the changes are legally enforceable, it’s essential to document any amendments in writing. A written agreement should clearly outline the new terms and be signed by both parties. This helps avoid disputes and provides proof of the updated terms.

If the promissory note is being revoked entirely, both parties should sign a written statement confirming its cancellation. Whether it’s a promissory note or a repayment agreement in Colorado, proper documentation ensures clarity and provides legal protection to both the borrower and the lender.