Wisconsin Promissory Note Template [PDF + Download]

A Wisconsin promissory note is a legally binding contract presenting a borrower’s promise to repay the loan amount to a lender under certain conditions. It also stipulates interest rates, maturity dates, and potential penalties in default cases.

You can use promissory notes to formalize personal, business, and real estate Wisconsin loan agreements. To issue one, you can get help from a reliable lawyer or use Wisconsin promissory note templates, which is a quicker and more affordable option.

Read on to learn what the meaning of promissory notes is and how to ensure their validity by respecting the signing requirements, maximum interest rates, and other important elements.

Types of Promissory Notes in Wisconsin

There are two kinds of promissory notes—secured and unsecured. The main difference between them is the inclusion of collateral, which directly influences how the lender can enforce such notes.

Let’s learn more about these two types of promissory notes in Wisconsin:

Types of Promissory Notes

#1. Secured Promissory Note

A secured promissory note specifies collateral, among other necessary stipulations (e.g., maturity dates and loan amounts). Collateral is the borrower’s piece of property or asset, such as a house or vehicle, that the lender can put a lien on if the borrower cannot pay off the debt.

The borrower must prove they are entitled to a piece of property before using it as collateral in a Wisconsin debt agreement. If the borrower defaults on payment, the lender can sell the collateral and reclaim the loan amount, with or without the interest rates stated in the agreement.

#2. Unsecured Promissory Note

An unsecured promissory note does not stipulate collateral and is based solely on the borrower’s promise to repay the debt. Although it features other terms (deadlines, loan amount, etc.), this type of note can be challenging to enforce.

If the borrower defaults on payment, the lender must file a claim in small claims court, a procedure that typically lasts longer than enforcing a secured promissory note. Additionally, small claims court cases can be costly and have a lower success rate in general.

Signing Requirements for Promissory Notes in Wisconsin

Ensuring that notes are legally binding in this region implies respecting the promissory note Wisconsin requirements.

Let’s examine them carefully:

Signing Requirements

Promissory notes must be in written form.
They need to provide information about the parties involved (names, contact details, addresses, etc.).
Notes should be subject to Wisconsin laws and define the repayment terms and maturity date, as well as collateral (only applicable for secured promissory notes).
Both parties must sign the notes.

Following the rules above when issuing a Wisconsin promissory note will make this document valid in court. However, you can also have a notary public witness this contract, which provides extra legal protection. Although notarizing this document is not mandatory, it is highly suggested for loans over $10,000.

Statutory Considerations for Wisconsin Promissory Notes

When creating a promissory note, you must follow the state-specific usury laws in Wisconsin Statutes (Chapter 138 (Money and Rates of Interest)). The usury laws set the interest rate caps for all types of loans in this state.

Let’s see the details:

Loan Type	Interest Rate Limit
With a contract	12% (§ 138.05(1)(a))
Without a contract	5% (§ 138.04)
Payday loans after the maturity date	2.75% a month (§ 138.14(10)(a))
Payday loans before the maturity date	No limits (§ 138.14(10)(a))
Pawnbrokers	The maximum loan is $150, capped at a 3% rate per month (§ 138.10(2)(4))
Loans exceeding $3,000 by licensed lenders	21%, 6% above the two-year US treasury rate, or 6% above the six-month treasury bill rate, whichever is higher (Applicable only for contracts signed from November 1, 1981, to November 1, 1984) (§ 138.09(7)(bn)(2))
Loans under $3,000 by licensed lenders	23%, 6% above the two-year US treasury rate, or 6% above the six-month treasury bill rate, whichever is higher (Applicable only for contracts signed from November 1, 1981, to November 1, 1984) (§ 138.09(7)(bn)(1))

The maximum interest rates for real estate, business, and personal loans are crucial for making promissory notes valid and enforceable. Failure to adhere to the rate limits can invalidate your Wisconsin repayment agreement or annul your interest rates completely.

How To Enforce a Promissory Note in Wisconsin

To enforce a promissory note in Wisconsin, the lender must take legal action and sell collateral or reach out to small claims court, depending on the type of note.

Before taking these actions, it is advisable for lenders to remind the borrower to pay off the debt by sending a demand letter, which is a non-judiciary attempt to recoup the debt.

If the borrower fails to respond, a secured promissory note owner can use the right to sell the borrower’s asset or property and use the funds to cover the loan amount, including the interest rates.

On the other hand, an unsecured enforceable promissory note in Wisconsin allows for compensation in small claims court for loans smaller than $10,000. This procedure involves submitting a claim with both parties’ names and addresses, the loan sum, and a short claim description. The case must be initiated within six years after the maturity date.

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

A promissory note in Wisconsin can be changed or revoked if both the lender and the borrower agree to amendments or cancellations. In addition to agreeing upon new terms, parties must issue a new written contract with the modified terms or reasons for revocation and sign it.

Amended promissory notes should include both new elements and references to the original ones. To better understand this process, we recommend examining promissory note samples and comparing the available original and amended versions. Parties can also hire a professional for more profound and sound advice on modifying or canceling promissory notes.