Statute of Limitations on a Personal Loan


When choosing a personal loan it is wise to compare interest rates and loan terms. You also want to familiarize yourself with your state's statute of limitation on written contracts. If you live in a state where the statute of limitations is on the high end, you want to be sure there is minimum chance of defaulting on the loan, or else the bank could pursue you for the delinquent amount for up to fifteen years.


  • Personal loans are written contracts identifying the terms and conditions of a loan. The loan is not valid if it does not contain your and your debtor's signatures and the effective date of the loan. Payment activity on the loan contract begins when the first payment is received. It is on this date that the statute of limitations first starts.


  • The clock on a statute of limitations resets every time there is new payment activity on a loan. A few other scenarios reset the clock on debt, including a creditor writing off a loan amount at a loss -- a process known as "discharging" debt -- or a creditor obtaining a judgment from a court judge for the debt amount plus interest fees. The last date of activity starts the clock ticking for the final time.

Time Frame

  • A creditor has up to the statute of limitations to bring legal proceedings against a debtor for the collection of an unpaid personal loan. As long as the creditor acts within the statute of limitations, the creditor can sue for the debt amount along with any applicable fees, such as interest charges or court filing fees. Failure to bring a lawsuit within this time makes the debt uncollectible. Delinquent payments remain on a consumer credit file for up to seven years.

Sample Statute of Limitations

  • Statutes of limitations for personal loans, which are classed as written contracts, vary from state to state. For example, states such as North Dakota, Maryland and Mississippi have the shortest statute of limitations in the country, each with three years. Ohio and Rhode Island have the longest statute of limitations in the country, each with 15 years.


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