South Carolina Promissory Note Template [PDF + Download]

A South Carolina promissory note legally obligates borrowers to repay the loan they agreed upon with lenders. The note states the terms under which borrowers should pay off the loan, including details such as due dates and interest rates.

Promissory notes are typically used along with South Carolina loan agreements, and their purpose is to formalize them. As long as they are written, take the proper form, and are signed by both parties, promissory notes are legally binding in this region.

Hiring an attorney for promissory notes in this state is not mandatory. Therefore, you can learn about the meaning of promissory notes, as well as take a closer look at Contracts.net promissory note templates if you wish to create one quickly and effortlessly.

Types of Promissory Notes in South Carolina

Based on the security levels, you can use the two main South Carolina promissory notes—unsecured or secured. Though similar in some respects, the two types of notes have different legal powers.

Let’s review them in more detail:

Types of Promissory Notes

#1. Unsecured Promissory Note

Unsecured promissory notes are official agreements that stipulate the parties’ information, terms, dates, and other key loan elements. However, because they are trust-based, they can be challenging to enforce.

In other words, unsecured notes do not feature collateral, a piece of a borrower’s property or asset (e.g., a car or other vehicle) that a lender can take as compensation if a borrower breaches a South Carolina repayment agreement. In such cases, a lender must claim recovery in other ways, including filing a suit against a borrower.

#2. Secured Promissory Note

Secured promissory notes bring more chances for a lender to collect the debt, as their key element is collateral. More precisely, if a borrower defaults on the promissory note, the lender can seize a borrower’s asset or property to recoup the loan.

Even if the collateral value is higher than the loan amount stated in a note and South Carolina debt agreement, the lender may sell the collateral, recover the amount, and return what’s left to the borrower.

Signing Requirements for Promissory Notes in South Carolina

The authors must stick to certain promissory note South Carolina requirements to make it valid and enforceable:

Signing Requirements

Have a note in written form.
Provide information about both parties (full name, address, contact details).
Specify the loan sum, interest rate, repayment terms, and date.
Outline collateral if a note is secured.
Indicate that the document is subject to the laws of the State of South Carolina.

While it is necessary for both parties to sign the note, this does not apply to witnesses; nevertheless, it is advisable. A notary public is also not mandatory for this type of document. Still, we suggest notarizing all promissory notes for loans over $10,000.

Statutory Considerations for South Carolina Promissory Notes

Title 34, Chapter 31, and Title 37, Chapter 3 of the South Carolina Code of Laws define the maximum interest rates for monetary judgments and personal and business loans, whether supervised or unsupervised.

Each type of loan has its specific limitations, as outlined below:

Loan Type	Interest Rate
General	8.75%
Supervised loans	18%
Unsupervised loans	12%
Monetary Judgments	An interest rate will be calculated with the Wall Street Journal’s published prime rate plus 4% compounded annually each year a borrower owes damages. (As stated in (§ 34-31-20(B)):)

Importantly, lenders should always adhere to the interest rate limitations to avoid penalties or other repercussions, such as having their interest rates annulled.

How to Enforce a Promissory Note in South Carolina?

To enforce a promissory note in South Carolina, the loan provider can take legal action and use a borrower’s collateral, send a letter of demand, or file a small or large court claim. An enforceable promissory note in South Carolina takes effect based on whether the parties signed a secured or unsecured note.

In the former case, a lender can take collateral, guaranteeing that a borrower will pay off the debt. A lender can ask for professional help, that is, hire a repossession agency that charges service fees but is highly effective.

In the latter case, a lender can send a ‘letter before claim’ and request repayment. If the borrower does not respond promptly, the lender can opt for small claims court.

This court has jurisdiction over any South Carolina promissory note with a loan value of up to $7,500. Additionally, South Carolina Code § 36-3-118 states that action to enforce a borrower's obligation to pay the debt must begin six years after the deadline or dates stated in a note.

How Can a Promissory Note in South Carolina Be Changed or Revoked?

A promissory note in South Carolina can be changed or revoked, provided that both parties agree to alterations or note cancellation.

There are additional rules for revocation or change of promissory notes in this state:

Promissory Note Revocation

No oral agreements; only written notes are held countable.
Both parties must sign the note.
The reasons for revocation or new amendments must be clearly defined.

Examining altered or revoked promissory note samples can help parties understand these processes better. Of course, lenders and borrowers could always seek professional help for such matters.