Idaho Promissory Note Template [PDF + Download]

A promissory note in Idaho is a legally binding document that outlines a borrower's promise to repay a specified amount under agreed terms. It serves as a part of a loan agreement in Idaho or as a standalone document, used to formalize essential details such as loan amount, interest rate, due date, and payment method.

This article will explore the meaning of a promissory note and break down the important elements you can find in a regular promissory note sample. Let's dive in!

Types of Promissory Notes in Idaho

There are two main types of promissory notes: secured and unsecured. These differ in the security offered to the lender.

Types of Promissory Notes

#1. Secured Promissory Notes

Secured promissory notes are less common but provide more protection to the lender than unsecured ones. In this type, the borrower pledges an asset as collateral to guarantee repayment. If the borrower fails to repay, the lender has the right to claim the collateral to recover the debt.

#2. Unsecured Promissory Notes

Unsecured promissory notes are more common and rely solely on the borrower's promise to repay the debt, as stated in the document. This type of note is riskier for the lender since there is no collateral to claim if the borrower defaults; if the borrower fails to repay, the lender must pursue legal action to recover the debt.

Signing Requirements for Promissory Notes in Idaho

Each promissory note must meet specific signing requirements to be enforceable.

Let's see what the requirements for the promissory note in Idaho are:

Signing Requirements

The document must be in writing.
It should clearly identify both the lender and the borrower.
It also must include key terms of the Idaho debt agreement, including the loan amount, interest rate, payment schedule, and due date.
Both parties must sign the document to confirm their agreement to its terms.

Although these elements are sufficient for legal validity, adding notarization or having witnesses sign the document can offer additional legal protection. In fact, notarization provides extra authenticity, reducing the risk of disputes about the validity of the signatures.

Additionally, using a promissory note template can help ensure that all necessary details are accurately included and that the document follows the correct structure.

Statutory Considerations for Idaho Promissory Notes

Promissory notes in Idaho must also adhere to state-specific regulations, including Title 28, Chapter 9, and Chapter 22 of the Idaho Statutes, which govern commercial transactions, usury laws, and interest rates.

For most agreements, the standard interest rate is capped at 12% unless a written contract specifies a different rate, provided it doesn’t exceed the agreed contractual limit (Sec. 28-22-104(1)). For money judgments, the rate is calculated as 5% plus the 12-month weekly average base rate determined by the Idaho State Treasurer (Sec. 28-22-104(2)).

These notes are versatile and can be used for personal and business loans. In any case, the document must clearly outline terms, comply with interest rate laws, and include all required signatures.

How to Enforce a Promissory Note in Idaho

To enforce a promissory note in Idaho, the lender should first send a formal demand letter to the borrower requesting repayment. If the borrower fails to pay, the lender can file a claim in Idaho small claims court for amounts up to $5,000. For larger amounts, the claim must be filed in a higher court.

Under Idaho law, an action to enforce a promissory note must be initiated within six years from the due date or the accelerated due date, as outlined in the statute of limitations.

When filing a claim, the lender must provide an enforceable promissory note in Idaho as evidence, along with records showing the borrower’s default. Remedies may include wage garnishment, liens, or other court-ordered actions to recover the debt.

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

A promissory note in Idaho can be changed or revoked if both the lender and borrower mutually agree to do so. Any amendments, such as adjusting the repayment terms or canceling the debt, should be documented in writing to avoid confusion or disputes later.

The revised document should clearly detail the agreed-upon changes to the repayment agreement as required by Idaho, maintaining transparency between the parties. Both the lender and borrower must sign the updated document to make it legally binding and enforceable.