As a business attorney who has drafted hundreds of promissory notes for California clients over the past twelve years, I created this completely free, attorney-reviewed California promissory note template in Word that you can download and customize in minutes. Whether you need a simple unsecured promissory note California lenders trust or a secured version that complies with California usury and disclosure rules, you’ll find both below.
This CA promissory note template is updated for 2025 and follows California Civil Code §§ 2954.10, 2074, Commercial Code § 9101 et seq., and the latest IRS revenue rulings on imputed interest (more on that below).
A promissory note is a written, enforceable promise to repay a debt under specific terms. In California, even a simple family loan can trigger usury limits (10% per year for non-exempt lenders under Article XV of the California Constitution) and federal imputed-interest rules if no interest is charged.
I’ve seen too many “handshake” loans turn into expensive lawsuits because the note lacked required California disclosures or improperly classified the loan as unsecured when collateral existed. My free California promissory note form eliminates those risks.
→ Click here to download the Secured + Unsecured California Promissory Note Template (Word) – 100% free, no email required.
The download includes:
| Feature | Why It Matters in California |
|---|---|
| Governing Law Clause (Calif.) | Avoids choice-of-law disputes |
| Usury savings language | Complies with 10% cap (Civil Code § 1916-2) |
| Prepayment clause options | Prevents lender prepayment penalties |
| Late fee capped at California maximum | Keeps fees enforceable |
| Attorney fees & costs provision | Recoverable under Civil Code § 1717 |
| Spousal consent (for married borrowers) | Protects community property interests |
An unsecured promissory note California lenders accept works best for:
Warning: Even unsecured notes must still comply with California usury law and IRS minimum interest rules (AFR – Applicable Federal Rate). My template automatically references the current IRS AFR table at IRS.gov/applicable-federal-rates.
| Secured | Unsecured | |
|---|---|---|
| Collateral required | Yes (real estate, vehicle, stock, etc.) | No |
| Default recovery | Foreclose or repossess | Sue and try to collect judgment |
| Interest rate flexibility | Higher rates often allowed | Strict 10% usury cap for most |
| Recording needed | Deed of Trust or UCC-1 | None |
Most private lenders in California are limited to 10% simple interest per year. Exemptions exist for:
Charging more than 10% without an exemption can make the entire interest portion void and expose you to treble damages (Civil Code § 1916-3).
If you charge 0% or below-market interest, the IRS requires you to impute interest at the Applicable Federal Rate. See current rates at IRS.gov Applicable Federal Rates. My template includes optional AFR language that automatically satisfies IRC § 7872.
Do I need to notarize a promissory note in California?
No, but notarization makes it self-authenticating in court (Evidence Code § 1452).
Can I charge compound interest?
Only if the lender is exempt from usury (most private individuals cannot).
Is an email or text message enough instead of a written note?
Possibly under the Electronic Signatures Act, but courts hate them in disputes. Always use a proper signed document.
Where do I record a secured promissory note?
The note itself is not recorded – the Deed of Trust (real estate) or UCC-1 (personal property) is.
This California promissory note template and article are provided for informational purposes only and do not constitute legal or tax advice. Laws change and your situation may have unique facts. Always consult a licensed California attorney or CPA before lending or borrowing significant sums. I am not your lawyer and no attorney-client relationship is formed by downloading or using this template.
Download Your Free 2025 California Promissory Note Template (Word) Now →
Last updated: November 2025