Updated October 12, 2026. Quick answer: For a loan of $50,000 or less, the greater of 12% a year or 5 points over the Federal Reserve 90-day commercial paper discount rate, and 9% a year on money after it becomes due when no rate is agreed (ORS 82.010).
Oregon promissory note at a glance
| Item | What the documents say |
|---|---|
| Maximum interest rate on a private loan | The greater of 12% a year or 5 points over the Federal Reserve 90-day commercial paper discount rate, on a loan of $50,000 or less |
| Rate if the note names none | 9% a year on money after it becomes due |
| Penalty for charging too much | A lender who exceeds the cap forfeits all interest and the borrower repays only the principal |
What Oregon law says about interest
For a loan of $50,000 or less, Oregon bars an annual rate above the greater of 12 percent or five percent over the Federal Reserve 90-day commercial paper discount rate.
When the parties have not agreed to a rate, interest on money after it becomes due is nine percent per annum under ORS 82.010.
The cap in ORS 82.010(3) does not apply to institutional lenders and certain real-property or government-backed loans (ORS 82.025); a lender who exceeds it forfeits all interest and the borrower repays only the principal.
The sources in their own words
- Interest limit: “annual rate of interest exceeding the greater of 12 percent” (ORS Chapter 82 Interest; Repayment Restrictions (2025 Edition)).
- Rate when none is agreed: “is nine percent per annum” (ORS Chapter 82 Interest; Repayment Restrictions (2025 Edition)).
- Exemption or penalty: “shall forfeit the right to collect or receive any interest” (ORS Chapter 82 Interest; Repayment Restrictions (2025 Edition)).
- Exemption or penalty: “Any loan secured by a first lien on real property” (ORS Chapter 82 Interest; Repayment Restrictions (2025 Edition)).
- Time limit to sue: “commenced within six years after the due date or dates” (ORS Chapter 73 Negotiable Instruments (2025 Edition)).
- Time limit to sue: “shall be commenced within six years” (ORS Chapter 12 Time Limitations (2025 Edition)).
If you’re ready to put it in writing
This is free to browse and there is no obligation to buy anything. LawDepot builds a state-specific promissory note through a question-and-answer form.
Build a promissory note at LawDepot
LawDepot pays us a commission if you buy through this link. It costs you nothing extra. We are not a law firm and this is not legal advice. Affiliate Disclosure.
Signing the note: signature, witness, notary
Under ORS 73.0401 a person is not liable on an instrument unless the person signed it or an agent who signed is binding on that person. A note is signed by the person who promises to pay.
None of the sections read for Oregon requires a witness or a notary for the note itself. A note secured by real property is a separate question; see what an intra-family mortgage requires.
How long a lender has to sue
Under Oregon’s enacted UCC 3-118 (ORS 73.0118) an action on a note payable at a definite time must start within six years after the due date, and ORS 12.080 gives six years on a contract.
A worked example: a $15,000 note
Suppose a relative lends you $15,000 and you sign a note for 5 years at 9% a year, paid monthly. With r = 9%/12 and n = 60 months, the level payment is principal times r divided by (1 minus (1 + r) to the power of negative n): $311.38 a month, computed here from these assumed inputs, not quoted. Over the 60 payments that is $18,682.80 in total, of which $3,682.80 is interest.
The 9% rate sits inside the Oregon limit in the table above, which is why it was chosen. The federal side of a loan between relatives is covered at family loan minimum interest rate and AFR rates by month.
A loan or a gift?
A loan that may never be repaid is taxed differently; see family loan vs gift, forgiving a family loan and gift tax by state.
What the documents do not say
- The cap’s second leg moves with a Federal Reserve rate that this page does not state, so 12% is the floor of the ceiling, not the ceiling.
- Institutional lenders and certain real-property or government-backed loans are outside the cap (ORS 82.025); the details are not reproduced here.
- Silence on a witness or notary in the sections read is not proof that no other Oregon law requires one.
Common mistakes
- Charging more than the limit in Oregon, which the table gives as the greater of 12% or 5 points over the Fed commercial paper rate ($50,000 or less), costs the lender the right to collect any interest on that loan; the borrower repays only the principal (ORS 82.010(4)).
- Leaving the rate out: if the parties have not agreed to a rate, the legal rate of 9% applies to money after it becomes due, and it is rarely what the parties meant.
- Waiting too long to enforce: Oregon allows 6 years to sue on a written note.
Related: promissory notes by state, promissory note requirements, family loan minimum interest rate, and gift tax by state.
Sources
- ORS Chapter 82 Interest; Repayment Restrictions (2025 Edition): https://www.oregonlegislature.gov/bills_laws/ors/ors082.html
- ORS Chapter 73 Negotiable Instruments (2025 Edition): https://www.oregonlegislature.gov/bills_laws/ors/ors073.html
- ORS Chapter 12 Time Limitations (2025 Edition): https://www.oregonlegislature.gov/bills_laws/ors/ors012.html
Sources: the primary documents linked above, read on October 12, 2026. General information, not legal or tax advice. Statutes change and courts read them, so confirm anything consequential with a lawyer licensed in your state.