Maine Promissory Note Template [PDF + Download]

A promissory note in Maine is a legally binding document in which a borrower promises to repay a specific amount to a lender.

This document is commonly used to formalize loan agreements in Maine, ensuring that both parties understand the terms and conditions of repayment. A basic promissory note sample outlines the terms of a loan, including the loan amount, due date, interest rate, and other key details.

Now, let's begin by defining the meaning of promissory notes and proceed to a more detailed explanation of their types, the elements required for enforceability, and additional vital considerations.

Types of Promissory Notes in Maine

The two primary types of promissory notes in Maine are secured and unsecured, differing based on whether collateral is involved.

Types of Promissory Notes

#1. Secured Promissory Note

A secured promissory note is backed by an asset or property pledged by the borrower as collateral. This collateral serves as a guarantee that the lender can recover the loan amount if the borrower fails to repay.

Because of this added security, lenders often offer better terms, such as lower interest rates, making secured notes a good option for larger loans.

#2. Unsecured Promissory Note

On the other hand, an unsecured promissory note does not require collateral. This type makes the loan riskier for the lender, who has no asset to claim if the borrower defaults. As a result, unsecured loans typically come with higher interest rates, stricter terms, and shorter repayment periods.

They are often used for smaller loans or situations where collateral is unavailable.

Signing Requirements for Promissory Notes in Maine

Promissory notes in Maine must meet specific signing requirements to ensure legal validity.

These elements are essential for the document to serve as enforceable proof of a loan agreement:

Signing Requirements

The promissory note must be in written form.
It should include the names and contact information (such as addresses or email addresses) of both the borrower and the lender.
The document must also detail the repayment terms of the Maine debt agreement, including the amount, interest rate, and due dates.
It must contain the signatures of both parties.

While not mandatory, having the note witnessed or notarized adds an extra layer of authenticity, which can be beneficial if legal disputes arise. This step helps confirm the parties' identity and intent to enter into the agreement.

Also, using a promissory note template can simplify the drafting process and ensure that all necessary details are included, which makes the document clear and adaptable to specific loan arrangements.

Statutory Considerations for Maine Promissory Notes

A promissory note in Maine must adhere to state-specific laws to ensure its validity. Maine’s usury laws govern interest rates, which vary depending on the type of loan, whether personal or business. These notes are suitable for both, provided they comply with state regulations.

The following table outlines key promissory note Maine requirements regarding interest rate caps and other legal considerations:

Loan Type	Interest Rate
With a Contract (Sec. 432(1))	No stated maximum
Without a Contract (Sec. 432(1))	6% per year
Consumer Loans (Sec. 2-401(2))	30% for loans ≤ $2,000, 24% for loans > $2,000 but < $4,000, 18% for loans > $4,000
Pawnbrokers (Sec. 3963(1))	25% per month for loans ≤ $500; 20% for loans > $500
Prejudgment Interest (Sec. 1602-B)	1-year U.S. Treasury Bill Rate + 3% (unless otherwise stated in the contract)
Post Judgment Interest (Sec. 1602-C)	1-year U.S. Treasury Bill Rate + 6% or contract rate, whichever is greater

Make sure your promissory note aligns with these laws for enforceability, particularly in setting interest rates. Maine law also exempts certain loans, such as first mortgages from financial institutions, from these caps.

How to Enforce a Promissory Note in Maine?

To enforce a promissory note in Maine, when a borrower defaults, the lender can take several steps to enforce repayment. Initially, it’s advisable to send a formal demand letter to the borrower, requesting payment and outlining the consequences of continued nonpayment.

If the borrower remains unresponsive, the lender can file a claim in Maine’s small claims court, provided the amount owed is $6,000 or less. To initiate the claim, the lender must complete a Statement of Claim form, available from any District Court clerk’s office or the Maine Judicial Branch website.

During the court hearing, it is essential to present the enforceable promissory note in Maine and any related documentation to establish the debt and the borrower’s default. If the court rules in favor of the lender, a judgment will be issued, which can then be enforced through various means, such as wage garnishment or property liens, to recover the owed amount.

It’s important to note that, according to Maine law, an action to enforce a promissory note payable at a definite time must be commenced within six years after the due date or dates stated in the note.

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

A promissory note in Maine can be changed or revoked if all parties involved agree to the changes. This mutual agreement is essential, as one party cannot unilaterally change the terms. Any modification, such as adjusting repayment terms or canceling the obligation, should be documented in writing to ensure clarity and legal validity.

The updated document, often called a revised repayment agreement in Maine, must clearly outline the agreed-upon changes and include signatures from all parties. This step protects everyone’s interests and prevents future disputes. Without proper documentation, amendments might not hold up in court.

To revoke a promissory note entirely, a written acknowledgment of cancellation should also be signed by all parties, confirming that the debt obligation no longer exists.