Iowa Promissory Note

Iowa Code §535.2 sets a 5% usury limit as a baseline, but §535.2(4) allows parties to contract for higher rates. The practical consumer maximum for unlicensed lenders is 21% APR. Commercial loans between businesses have no effective cap if the rate is specified in writing. Licensed consumer lenders may have higher permitted rates.

File a petition in Iowa District Court alleging the note, default, and damages. Iowa Code §554.3308 creates a presumption that the signature is genuine if the note is properly authenticated. Small claims court (Iowa Code §631) handles disputes up to $6,500. Prevailing plaintiffs can garnish wages or bank accounts to collect judgments.

Under Iowa UCC Article 3 (§554.3104), a negotiable instrument must: (1) be in writing and signed by the maker; (2) contain an unconditional promise to pay a sum certain in money; (3) be payable on demand or at a definite time; and (4) be payable to order or to bearer. If any element is missing, the note is not negotiable (still enforceable as a contract, but not as a UCC note).

Confession of judgment (cognovit) clauses are disfavored in Iowa and rarely enforced. Iowa courts are reluctant to allow judgment to be entered without notice or hearing. For commercial notes, some courts have enforced them in limited circumstances, but consumer confession clauses are void. Rely instead on acceleration clauses and traditional collection remedies.