Updated October 11, 2026. Quick answer: 8% a year on a promissory note, with exemptions that include original principal over $100,000, notes payable on demand or in one installment and not secured by household goods, qualifying business loans, and certain real-estate-secured loans (Ohio Revised Code 1343.01).
Ohio promissory note at a glance
| Item | What the documents say |
|---|---|
| Maximum interest rate on a private loan | 8% a year, with exemptions that include original principal over $100,000, notes payable on demand or in one installment and not secured by household goods, qualifying business loans, and certain real-estate-secured loans |
| Rate if the note names none | Set under section 5703.47 of the Revised Code on money that has become due and payable, unless a written contract provides a different rate |
| Penalty for charging too much | Not established by the documents read |
What Ohio law says about interest
Ohio lets the parties to a promissory note stipulate interest at any rate not exceeding eight per cent per annum, subject to the exemptions in division (B).
When money becomes due and payable on a note (in cases other than those covered by sections 1343.01 and 1343.02), the creditor is entitled to interest at the rate determined under section 5703.47 of the Revised Code, unless a written contract provides a different rate. This page does not state that percentage.
Division (B) allows a higher rate when the original principal exceeds $100,000; when the instrument is payable on demand or in one installment and is not secured by household furnishings or other goods used for personal, family, or household purposes; for qualifying business loans (a loan secured by an assignment of the obligor’s wages or by household goods is not a business loan); for a broker’s demand debit balance secured by securities; for certain federally or state-agency-backed mortgage loans; and for other loans secured by a mortgage, deed of trust or land installment contract on real estate, capped at eight percent over the ninety-day commercial paper discount rate at the fourth federal reserve district bank.
The sources in their own words
- Interest limit: “at any rate not exceeding eight per cent per annum” (Section 1343.01 Maximum rate of interest).
- Exemption or penalty: “exceeds one hundred thousand dollars” (Section 1343.01 Maximum rate of interest).
- Exemption or penalty: “payable on demand or in one installment” (Section 1343.01 Maximum rate of interest).
- Rate when none is agreed: “unless a written contract provides a different rate of interest” (Section 1343.03).
- Time limit to sue: “shall be brought within six years after the due date” (Section 1303.16).
- Time limit to sue: “promise in writing shall be brought within six years” (Section 2305.06).
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Signing the note: signature, witness, notary
Under Ohio’s UCC 3-401 (ORC 1303.41) a person is not liable on an instrument unless the person signed it or an agent signed for them. A note is signed by the person who promises to pay.
None of the sections read for Ohio 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
Ohio gives six years to sue on a note payable at a definite time under its enacted UCC 3-118, and six years on a written contract generally.
A worked example: a $15,000 note
Suppose a relative lends you $15,000 and you sign a note for 5 years at 7% a year, paid monthly. With r = 7%/12 and n = 60 months, the level payment is principal times r divided by (1 minus (1 + r) to the power of negative n): $297.02 a month, computed here from these assumed inputs, not quoted. Over the 60 payments that is $17,821.20 in total, of which $2,821.20 is interest.
The 7% rate sits inside the Ohio 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 percentage that section 5703.47 sets is not stated in the sections read, so no figure is given for a note that names no rate.
- 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 Ohio law requires one.
Common mistakes
- Charging more than the limit in Ohio, which the table gives as 8% (with the exemptions in division (B)): the sections read state no penalty for exceeding it, so check the consequences with a lawyer.
- Leaving the rate out: this page cannot give Ohio’s default rate, so write the rate down.
- Waiting too long to enforce: Ohio 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
- Section 1343.01 Maximum rate of interest: https://codes.ohio.gov/ohio-revised-code/section-1343.01
- Section 1343.03: https://codes.ohio.gov/ohio-revised-code/section-1343.03
- Section 1303.16: https://codes.ohio.gov/ohio-revised-code/section-1303.16
- Section 2305.06: https://codes.ohio.gov/ohio-revised-code/section-2305.06
- Section 1303.41 Signature necessary for liability on instrument: https://codes.ohio.gov/ohio-revised-code/section-1303.41
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.