Make a New Hampshire Promissory Note

What Is the Maximum Interest That May Be Charged?

The maximum interest rate that may be charged in New Hampshire is 10% unless another interest rate is agreed upon in writing by the parties.

How to Write a New Hampshire Promissory Note

To write a New Hampshire promissory note, it is important first to determine whether the note is secured. If it is, this information should be listed in the title. For example, Secured New Hampshire Promissory Note. If a secured note is not titled correctly, the court may treat it as unsecured if a dispute arises. Then, certain information is used to create the scope of the agreement:

• The date that the promissory note was created. This date, as well as the date listed for the signatures, is used to help verify that the parties entered into the agreement together. The dates also help determine the amount of time that a party to the agreement has to approach the court for help or for the lender to get involved in collections activities. The dates in the agreement should be formatted as month, day, and year.
• The identity for each person and their role within the agreement. This is the legal name of the person or entity and their role within the agreement. Parties include the lender, borrower, and, if needed, a cosigner. For example, Susan Jones, Co-Signer.
• The mailing address for each party. The mailing address should be listed for each party. If the promissory note is secured, the physical address for the borrower and any co-signer should be listed if it is different from the mailing address. This can help locate collateral if necessary. If the lender has a separate payment address, the payment address should be documented in the part of the New Hampshire promissory note that addresses repayment of the loan.
• The amount loaned to the borrower. This is the principal amount. It does not include interest charged for the loan. Before this document is executed, it is important to review this amount to ensure it is correct.
• The amount of yearly interest charged. Remember, if an interest rate is not specified, the lender may not charge more than 10%. However, if an interest rate is mentioned in writing, it can be any amount.
• Payment agreement. This is how the loan gets repaid. It must list how many payments (installments), the amount of each payment, and the due date for each payment. If there is a late fee, the amount should be documented as well as when it will be assessed.

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If the New Hampshire promissory note is secured, it should include a good description of the collateral. Without a description, a legal disagreement could cause the court to hold that the promissory note is unsecured.

Clauses are also inserted to create the terms and conditions of the loan. Some of the most commonly used clauses are:

• Interest Due in the Event of Default. This is the amount of interest that the borrower is responsible to pay if they do not comply with the terms and conditions of the promissory note. It is higher than the initially agreed upon and documented interest rate.
• Payment Allocation. This explains how payments made by the borrower are split between the principal balance and the interest rate.
• Prepayment. Whether the borrower will be financially penalized for wanting to pay off the loan early.
• Acceleration. Acceleration is the lender’s right to demand payment in full for the remaining balance of the loan if the borrower does not comply with the terms of the agreement.
• Attorney Fees and Costs. If the parties have a legal disagreement over the New Hampshire promissory note, this clause is used to explain how attorney fees and costs will be handled for each party.
• Waiver of Presentments. The lender has no legal requirement to be present when the borrower makes payments.
• Severability. If part of the promissory note is found to be invalid, the remainder of the note is still valid.
• Conflicting Terms. If conflicting terms are found in the promissory note, this clause explains how those terms will be clarified.
• Notice. Whether the lender will provide the borrower with notice if the lender will sue the borrower for default.
• Governing Law. The state whose laws will be consulted if there is a legal dispute related to the New Hampshire promissory note.

While there is no law requiring New Hampshire promissory notes to be notarized, it can be done to help verify that the signatures are legitimate. Only the borrower and co-signer need to sign the agreement.

A Sample New Hampshire Promissory Note with Examples for Each Step

A New Hampshire promissory note can be unsecured or secured; promissory notes in New Hampshire are regulated by contract law and, in some cases, securities law. A secured promissory note should be titled as such ("Secured New Hampshire Promissory Note"); it must also be further identified with specific language and requires a detailed description of the security interest (the property that will serve as the collateral). A secured promissory note should include the following section:

• Security and Priority: In this section, the borrower and lender (payee) agree that all obligations under the note will be secured by the collateral defined in the security agreement entered into between the borrower and lender. This section contains a general description of the collateral explicitly defined in the security agreement.

A secured promissory note is generally accompanied by a security agreement that allows the lender to seize the collateral (specific property) in the event of default by the borrower.

The security interest in the specific property should be outlined in a UCC financing statement. When the financing statement is filed with the appropriate government agency, the lender's interest in the specific property is deemed "perfected," giving the lender top priority over future lenders seeking a security interest in the same property.

Both unsecured and secured promissory notes in New Hampshire should include the following sections:

• Definition of Terms: This section includes a list of terms and their meanings used in the loan agreement  ("As used in this Agreement, the following terms shall have the meanings set forth below").
• Payments: These are provisions relating to the terms for repayment of the amount due, including principal and interest, overdue amounts, default/nonpayment rate, manner of payment, and extension. This section should specifically note the date the promissory note was devised, the name and mailing address of the borrower and lender, the amount of money loaned to the borrower, the amount/annual percentage rate of interest to be charged (as allowed by applicable New Hampshire state law governing maximum interest/usury rates for written contracts), how repayment will be made (installments, interest-only, lump sum, or, in the case of a secured promissory note, a balloon payment), the number of payments, the amount of each payment, the due date of each payment, any late fee to be charged for late payment, and where and how payment is to be made.
• Allocation of Payments: This section describes how much of each payment will apply to the interest/principal.
• Guaranty/Co-Signer (optional): In this section, a third party (the guarantor) agrees to be directly or collaterally responsible for the obligation of the borrower to the lender in the event of default (the borrower fails to pay).
• Representations & Warranties: Representations and warranties is a clause that explains the facts and protections in the event of default, respectively, if the statements made are not true.
• Covenants: A covenant in a loan agreement requires the borrower to fulfill certain conditions, such as punctual payment of principal, or prevents the borrower from taking certain actions.
• Defaults/Interest Due upon Default: This section defines the events that constitute a default and the interest due upon default (as allowed by applicable New Hampshire state law).
• Acceleration: This section requires the borrower to repay the remaining balance in the event of a default.
• Prepayment: This section states whether there will be a prepayment penalty or if the borrower is allowed to pay a sum of money to the lender before it is due/demanded without a penalty for doing so.
• Attorney Fees and Costs: This section describes which party will be held responsible for attorney fees and court costs should a case be filed and adjudicated in court due to a default.
• Waiver of Presentments: This section allows the lender to receive payment without presenting the promissory note.
• Non-Waiver: This section states that the entire promissory note is not waived if either party waives a certain section of the document.
• Severability: This section states that the rest of the promissory note will still be valid should a particular section be found illegal or incapable of enforcement.
• Integration: This section states that the promissory note constitutes the entire agreement between the parties.
• Conflicting Terms: This section states that an amendment will resolve any issue(s) and be determinative should the promissory note include terms that conflict.
• Notices: This section states the required form of all notices, requests, demands, claims, and other communications under the note, including notice to the borrower that the lender may seek a judgment against the borrower without notice and the addresses to which all official or legal correspondence should be delivered.
• Governing Law: This section defines the state law that will govern the promissory note.
• Dated Signature: In New Hampshire, both unsecured and secured promissory notes must be signed and dated by the borrower and any co-signer; the lender need not sign. There is no legal requirement for promissory notes to be witnessed or notarized in New Hampshire. Still, the parties may decide to have the document certified by a notary public for protection in the event of a lawsuit.

Promissory Note Resources in New Hampshire

National Consumer Law Center

Credit Union National Association Guide to State Usury Laws                                                          

Help Center/Federal Student Aid      

CollegeScholarships.org

New Hampshire Legal Aid                    

Granite State Management & Resources (GSM&R)