Updated October 11, 2026. Quick answer: No cap on a non-medical loan when the rate is in writing, and 10% a year when it is not (A.R.S. 44-1201).
Arizona promissory note at a glance
| Item | What the documents say |
|---|---|
| Maximum interest rate on a private loan | No cap on a non-medical loan when a different rate is contracted for in writing |
| Rate if the note names none | 10% a year for a non-medical loan |
| Penalty for charging too much | Taking more than the legal maximum forfeits all interest (A.R.S. 44-1202) |
What Arizona law says about interest
For a non-medical loan, interest is ten percent a year unless a different rate is contracted for in writing, in which event any rate of interest may be agreed to.
Ten percent a year applies when no different rate is contracted for in writing.
Taking more than the maximum permitted by law forfeits all interest (44-1202); medical debt has a separate cap of the lesser of the one-year Treasury yield or three percent a year.
The sources in their own words
- Rate when none is agreed: “interest shall be at the rate of ten percent a year” (A.R.S. 44-1201 Rate of interest for loan or indebtedness).
- Exemption or penalty: “forfeit all interest” (A.R.S. 44-1202 Forfeiture of all interest).
- Time limit to sue: “within six years after the cause of action accrues” (A.R.S. 12-548 Contract in writing for debt; six year limitation).
- Time limit to sue: “within six years after the due date or dates stated” (A.R.S. 47-3118 Statute of limitations).
- Signature: “written undertaking to pay money signed by the person undertaking to pay” (A.R.S. 47-3103 Definitions).
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Signing the note: signature, witness, notary
Arizona’s enacted UCC 3-103 defines a promise as a written undertaking to pay money signed by the person undertaking to pay. A note is signed by the person who promises to pay.
None of the sections read for Arizona 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
An action for debt evidenced by a written contract executed in Arizona must be commenced within six years, and a note payable at a definite time within six years after its due date.
A worked example: a $25,000 note
Suppose a relative lends you $25,000 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): $518.96 a month, computed here from these assumed inputs, not quoted. Over the 60 payments that is $31,137.60 in total, of which $6,137.60 is interest.
The 9% rate is an assumed figure for the illustration, not a recommended or typical one; the Arizona 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
- The documents read cap only medical debt; whether other statutes limit a particular private loan is a legal question they do not settle.
- Silence on a witness or notary in the sections read is not proof that no other Arizona law requires one.
Common mistakes
- Taking more than the maximum permitted by law forfeits all interest in Arizona (A.R.S. 44-1202); for a non-medical loan the statute sets no maximum on a rate contracted for in writing.
- Leaving the rate out: for a non-medical loan, interest is 10% a year unless a different rate is contracted for in writing, and it is rarely what the parties meant.
- Waiting too long to enforce: Arizona 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
- A.R.S. 44-1201 Rate of interest for loan or indebtedness: https://www.azleg.gov/ars/44/01201.htm
- A.R.S. 44-1202 Forfeiture of all interest: https://www.azleg.gov/ars/44/01202.htm
- A.R.S. 12-548 Contract in writing for debt; six year limitation: https://www.azleg.gov/ars/12/00548.htm
- A.R.S. 47-3118 Statute of limitations: https://www.azleg.gov/ars/47/03118.htm
- A.R.S. 47-3103 Definitions: https://www.azleg.gov/ars/47/03103.htm
Sources: the primary documents linked above, read on October 11, 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.