Updated October 12, 2026. Quick answer: Up to 16% a year on the unpaid principal balance, with loans to a corporation, partnership, limited liability company or trust outside the limit, and 6% a year when no rate is agreed (Neb. Rev. Stat. 45-101.03 and 45-102).
Nebraska promissory note at a glance
| Item | What the documents say |
|---|---|
| Maximum interest rate on a private loan | 16% a year on the unpaid principal balance; loans to a corporation, partnership, limited liability company or trust are outside the limit |
| Rate if the note names none | 6% a year |
| Penalty for charging too much | Not established by the documents read |
What Nebraska law says about interest
Nebraska validates any agreed rate of interest on a loan not exceeding sixteen percent per annum on the unpaid principal balance.
When no rate is contracted, interest on a loan runs at six percent per annum on the unpaid principal balance (from September 1, 1983), unless the parties agree a greater rate up to the 16% limit.
The 16% limit does not apply to loans made to a corporation, partnership, limited liability company or trust, among other listed exemptions.
The sources in their own words
- Interest limit: “not exceeding sixteen percent per annum on the unpaid principal balance” (Nebraska Revised Statute 45-101.03 General interest rate; maximum).
- Rate when none is agreed: “six percent per annum commencing on September 1, 1983” (Nebraska Revised Statute 45-102 Interest; legal rate; exception).
- Exemption or penalty: “Loans made to any corporation, partnership, limited liability company, or trust” (Nebraska Revised Statute 45-101.04 General interest rate; when not applicable).
- Exemption or penalty: “one hundred thousand dollars or more of the borrower to any one financial institution, licensee, or permittee” (Nebraska Revised Statute 45-101.04 General interest rate; when not applicable).
- Time limit to sue: “any agreement, contract, or promise in writing” (Nebraska Revised Statute 25-205 Actions on written contracts).
- Time limit to sue: “can only be brought within five years” (Nebraska Revised Statute 25-205 Actions on written contracts).
- Time limit to sue: “within six years after the due date or dates stated in the note” (Nebraska UCC 3-118 Statute of limitations).
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Signing the note: signature, witness, notary
None of the sections read for Nebraska 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 Nebraska’s Uniform Commercial Code, an action to enforce a note payable at a definite time must be commenced within six years after the due date stated in the note (or the accelerated due date), and on a demand note within six years after demand is made to the maker; a demand note on which no demand is made is barred if neither principal nor interest has been paid for ten years (UCC 3-118(a) and (b)). Section 25-205 separately allows five years on any agreement, contract, or promise in writing.
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 sits inside the Nebraska 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
- Nebraska’s UCC signing rule for notes was not archived, so the signing rule is not established here.
- The documents read state no penalty for charging above the limit.
- Silence on a witness or notary in the sections read is not proof that no other Nebraska law requires one.
Common mistakes
- Charging more than the limit in Nebraska, which the table gives as 16% (loans to corporations, partnerships, LLCs and trusts outside): the sections read state no penalty, so this page does not say what a violation costs the lender.
- Leaving the rate out: the legal rate of 6% applies when a note names none, and it is rarely what the parties meant.
- Waiting too long to enforce: Nebraska allows six years after the due date stated in the note to sue on a note payable at a definite time (UCC 3-118(a)).
Related: promissory notes by state, promissory note requirements, family loan minimum interest rate, and gift tax by state.
Sources
- Nebraska Revised Statute 45-101.03 General interest rate; maximum: https://nebraskalegislature.gov/laws/statutes.php?statute=45-101.03
- Nebraska Revised Statute 45-102 Interest; legal rate; exception: https://nebraskalegislature.gov/laws/statutes.php?statute=45-102
- Nebraska Revised Statute 45-101.04 General interest rate; when not applicable: https://nebraskalegislature.gov/laws/statutes.php?statute=45-101.04
- Nebraska Revised Statute 25-205 Actions on written contracts: https://nebraskalegislature.gov/laws/statutes.php?statute=25-205
- Nebraska UCC 3-118 Statute of limitations: https://nebraskalegislature.gov/laws/ucc.php?code=3-118
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.