Promissory Note requirements in Maryland
- Must be in writing and signed by the borrower.
- Include the principal amount, interest rate, and repayment schedule.
- Specify the due date or installment payments.
- For real estate loans, have the borrower's signature witnessed by two adults.
- Notarization is not required for most notes but is recommended for enforceability.
- For notes over $500, witness rules may apply; check with a lawyer.
The process in Maryland
- Start with a title: 'Promissory Note'.
- State the loan amount and date the money is given.
- Write the borrower's and lender's full names and addresses.
- State the interest rate (annual) and whether it is fixed or variable.
- Describe the repayment plan: lump sum or installments with dates.
- Include a clause about what happens if the borrower defaults.
- Add a place for signatures and date. Have witnesses sign if required.
- Give the signed note to the lender. Keep a copy for both.
Download our Maryland promissory note template now to get started.
Create your promissory noteBudgeting for a Promissory Note
Writing a promissory note in Maryland is free if you do it yourself. Using a lawyer or online service may cost $50 to $200. Notarization costs around $10 to $20 per signature.
Before You Begin: MD Promissory Note
Gather key details and understand Maryland's rules before drafting your promissory note. This checklist helps you avoid common pitfalls and ensures your note is enforceable.
- Confirm the identities and full legal names of both lender and borrower, plus addresses and contact info.
- Decide the loan amount, interest rate (if any), repayment schedule, and due date – and note whether it's a demand or term note.
- Check if Maryland usury limits apply to your interest rate (for general consumer loans, the legal limit is 8% unless otherwise exempt).
- Determine if the note should be secured by collateral (e.g., real estate or vehicle) – if so, you may need a separate security agreement and filing.
- Consider whether you want a notary acknowledgment – while not required for validity, notarization is recommended for easier enforcement in court.
- Have all parties sign the note; keep a copy for each. If the loan is over $500, it's prudent to document the transaction in writing to satisfy Maryland's statute of frauds for certain contracts.
FAQs
Does a promissory note need to be notarized in Maryland?
No, notarization is not required by law for most promissory notes. But notarizing the signatures helps prove they are genuine, which can make the note easier to enforce in court.
How many witnesses do I need for a promissory note in Maryland?
For notes secured by real estate, Maryland law requires two adult witnesses. For unsecured notes, witnesses are not legally required, but they can help verify the signing.
Where do I file a promissory note in Maryland?
You do not file a promissory note with the state. Keep it as a private record. If it is secured by real estate, you may record it with the county land records to perfect the lien.
Can I use a promissory note for a personal loan in Maryland?
Yes. A promissory note is a valid personal loan agreement. It protects both parties by clearly stating the terms.