Updated October 12, 2026. Quick answer: Outside consumer lending the parties may contract for any finance charge unless other law provides otherwise, and in a court action on a note with no provision relating to interest, prejudgment interest is the one-year Treasury bill rate plus 3%, accruing from notice of claim or the filing of the complaint (9-A M.R.S. 2-601 and 14 M.R.S. 1602-B).
Maine promissory note at a glance
| Item | What the documents say |
|---|---|
| Maximum interest rate on a private loan | No general cap read for a private note: the consumer-loan caps apply only to consumer loans (personal, family or household loans to an individual) made by persons regularly in the business of lending |
| Rate if the note names none | No rate accrues under the documents read before a lawsuit; in a court action on a note with no provision relating to interest, prejudgment interest is the one-year U.S. Treasury bill rate plus 3%, from notice of claim or the complaint (not available in small claims unless based on a contract or note) |
| Penalty for charging too much | Not established by the documents read |
What Maine law says about interest
Maine’s consumer-loan rate caps apply to loans made by persons regularly in the business of lending, while for other credit transactions the parties may contract for any finance charge unless other law says otherwise.
In civil actions (other than small claims) that do not involve a contract or note with a provision relating to interest, prejudgment interest is the one-year U.S. Treasury bill rate plus 3%, accruing from notice of claim or, without notice, the filing of the complaint; where a contract or note has a provision relating to interest, the rate in it applies; in small claims, prejudgment interest is not recoverable unless the rate is based on a contract or note.
A private lender outside the consumer-loan definition is not under the 9-A consumer rate caps; other-law limits and criminal usury were not read.
The sources in their own words
- Interest limit: “the parties may contract for the payment by the debtor” (Title 9-A Section 2-601 Finance charge for other credit transactions).
- Exemption or penalty: “made by a person regularly engaged in the business of making loans” (Title 9-A Section 1-301 General definitions).
- Rate when none is agreed: “allowed at the one-year United States Treasury bill rate plus 3%” (Title 14 Section 1602-B Interest before judgment).
- Rate when none is agreed: “is allowed at the rate set forth in the contract or note” (Title 14 Section 1602-B Interest before judgment).
- Time limit to sue: “must be commenced within 6 years after the due date or dates” (Title 11 Section 3-1118 Statute of limitations).
- Time limit to sue: “shall be commenced within 6 years after the cause of action accrues” (Title 14 Section 752 Six years).
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Signing the note: signature, witness, notary
Under 11 M.R.S. 3-1401 a person is not liable on an instrument unless the person (or an authorized agent) signed it. A note is signed by the person who promises to pay.
None of the sections read for Maine 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
Maine’s enacted UCC 3-1118 gives 6 years after the due date to sue on a note payable at a definite time, and 14 M.R.S. 752 sets 6 years for civil actions generally.
A worked example: a $20,000 note
Suppose a relative lends you $20,000 and you sign a note for 5 years at 8% a year, paid monthly. With r = 8%/12 and n = 60 months, the level payment is principal times r divided by (1 minus (1 + r) to the power of negative n): $405.53 a month, computed here from these assumed inputs, not quoted. Over the 60 payments that is $24,331.80 in total, of which $4,331.80 is interest.
The 8% rate is an assumed figure for the illustration, not a recommended or typical one; the Maine rules above decide what a lender may charge. 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
- Limits found in other Maine law, and criminal usury, were not read.
- The Treasury bill rate changes and is not stated on this page.
- Silence on a witness or notary in the sections read is not proof that no other Maine law requires one.
Common mistakes
- Assuming that no stated cap means no rule: the Maine table above says no general cap was read for a private note, and 9-A M.R.S. 2-601 allows any finance charge outside consumer credit transactions only where other law does not provide otherwise; the page lists what the documents do not say.
- Leaving the rate out: in a court action on a note with no provision relating to interest, prejudgment interest at the one-year Treasury bill rate plus 3% runs only from notice of claim or the complaint, and it is rarely what the parties meant.
- Waiting too long to enforce: Maine 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
- Title 9-A Section 2-601 Finance charge for other credit transactions: https://legislature.maine.gov/statutes/9-A/title9-Asec2-601.html
- Title 9-A Section 1-301 General definitions: https://legislature.maine.gov/statutes/9-A/title9-Asec1-301.html
- Title 14 Section 1602-B Interest before judgment: https://legislature.maine.gov/statutes/14/title14sec1602-B.html
- Title 11 Section 3-1118 Statute of limitations: https://legislature.maine.gov/statutes/11/title11sec3-1118.html
- Title 14 Section 752 Six years: https://legislature.maine.gov/statutes/14/title14sec752.html
- Title 11 Section 3-1401 Signature necessary for liability on instrument: https://legislature.maine.gov/statutes/11/title11sec3-1401-2.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.