<PAGE>

                                                                     Exhibit 4.6

                       [Front Side of One Month Term Note]

                             The Thaxton Group, Inc.
                              1524 Pageland Highway
                         Lancaster, South Carolina 29720

                  Subordinated One Month Term Note - Series M1



Date of Issue _____________________________ , 20__     No.______________________

         FOR VALUE RECEIVED, The Thaxton Group, Inc. (the "Issuer") hereby
promises to pay the principal amount of _________________________ Dollars
($_______________) on the Stated Maturity Date set forth below, as the same may
be extended as provided herein, to


Name _____________________________

     _____________________________    Social Security or    Stated Maturity Date
                                      Employer I.D. No.         ("Maturity")

Address __________________________    __________________    ____________________

        __________________________

(the "Holder"), or registered assigns, in the manner provided for on the reverse
side hereof. This Subordinated Term Note (the "Term Note") shall bear interest
on the unpaid principal amount from the date of issue until paid at the initial
rate of _____________ percent (____%) per annum, such interest to be paid at
Maturity and be compounded daily, provided that such interest rate shall be
subject to adjustment as described on the reverse side hereof.

         Issuance and Indenture. This Term Note is one of a series of a duly
authorized issue of securities of the Issuer ((each a "Security") and, together,
the "Securities") issued and to be issued in one or more series under an
Indenture, dated as of February 17, 1998 (herein called the "Indenture") between
the Issuer and The Bank of New York, New York, New York, as Trustee (herein
called the "Trustee" which term includes any successor Trustee under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations, duties and
immunities thereunder of the Issuer, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.

         Reference is made to the further provisions of this Term Note set forth
on the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.

         Unless the Certificate of Authentication hereon has been executed by
the Trustee, either directly or through an Authenticating Agent, by the manual
or facsimile signature of an authorized signer, this Term Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

This Security is not a deposit, savings account or an obligation of an insured
depository institution and is not insured by The Federal Deposit Insurance
Corporation (FDIC) or any other governmental agency.
<PAGE>

                       [Front Side of One Month Term Note]


ATTEST:                                     THE THAXTON GROUP, INC.


By: ________________________________        By: _______________________________
         Allan F. Ross, Secretary               James D. Thaxton
                                                Chairman of the Board, President
                                                and Chief Executive Officer
[SEAL]

Authentication Certificate:

         This Term Note is one of the series of Securities referred to in the
within-mentioned Indenture.

                                              The Bank of New York, as Trustee


                                              ------------------------------
                                                       Authorized Agent

                                       2
<PAGE>

               [Reverse Side of Subordinated One Month Term Note]


         Payment and Interest Accrual. Payment of the principal of and interest
on this Term Note shall be made in lawful money of the United States at the
principal office of The Thaxton Group, Inc., 1524 Pageland Highway, Lancaster,
South Carolina 29720, or at such other place as the Issuer may designate to the
Holder in writing ("Place of Payment"); provided, however, that any such payment
may be made, at the option of the Issuer, by check mailed to the registered
address of the Holder. Upon payment or tender of payment hereof at Maturity or
earlier redemption (in whole), this Term Note shall be surrendered to the Issuer
for cancellation at the Place of Payment. Unless otherwise agreed in writing by
the Issuer, interest hereon shall cease to accrue, and the Issuer shall have no
further liability with respect thereto, upon payment (or tender of payment in
the aforesaid manner) of the outstanding principal amount hereof plus all
accrued but unpaid interest at Maturity or earlier redemption.

         Interest Rate and Interest Rate Adjustment. The interest rate payable
on the principal amount of this Term Note shall be determined by the Issuer and
shall not be less than the rate established for the most recent auction average
of United States Treasury Bills with maturities of 13 weeks but in no event will
the interest rate be less than 2% nor more than 12% per annum. The Issuer may
adjust the interest rate payable on this series of Securities. Any such
adjustment shall be determined in accordance with the preceding sentence on the
last Business Day of each month and shall be effective on the first day of the
succeeding month for Securities of this series issued or extended on or after
the first day of such month. Any adjustment of the interest rate shall remain in
effect unless and until a further adjustment is made by the Issuer.

         Possible Automatic Extensions. No later than 15 days prior to Maturity,
the Company will give the Holder of this Term Note notice by first-class mail of
the Maturity and provide the Holder with a copy of the Company's most recent
quarterly report on Form 10-Q filed with the United States Securities and
Exchange Commission (the "Commission"), or, if the Holder has not previously
been provided with such, a copy of the Company's most recent annual report on
Form 10-K filed with the Commission . This Term Note (with any interest payable
at Maturity being added to the principal amount hereof) will be automatically
extended for successive terms, equal in duration to the original term hereof, at
the rate of interest then in effect at Maturity for Term Notes of this series
unless, prior to Maturity, the Issuer receives written notification of the
Holder's intent to redeem the Term Note or receive the interest payment due at
Maturity. All of the terms and conditions applicable to the Term Note when
issued will also apply during each period of extension. Upon any extension
hereof, unless this Term Note is surrendered and cancelled and a new Term Note
is issued in its stead, the principal amount of this Term Note shall be deemed
amended to include any accrued but unpaid interest that is added to the
principal amount and the date of Maturity shall be deemed amended to be the date
of Maturity of the period of extension.

         Redemption Prior To Maturity By Holder. The Holder shall have the right
at its option to redeem this Term Note, in whole or in part, on any Business Day
prior to Maturity. Upon any such redemption, the Holder shall forfeit all
interest accrued since the date of issuance of this Term Note (or, in the case
of a renewal or extension of this Term Note, from the date of the most recent
renewal or extension); provided that the Issuer, in its sole discretion, may
waive all or any part of such forfeited interest. Accrued interest, the
forfeiture of which is waived by the Issuer, upon redemption by the holder prior
to Maturity shall be payable on the redemption date. The Issuer retains the
absolute right, however, to require the Holder at any time (including the time
as which the Holder may otherwise request a partial or full redemption of this
Term Note) to give the Issuer up to 30 days' prior written notice by first class
mail of a redemption demanded by the Holder, which notice shall specify the
principal amount of the Term Note to be redeemed and the redemption date which
shall be a Business Day. Accrued interest on the principal amount specified in
such redemption notice shall be payable on the redemption date.

         Optional Redemption By Issuer. This Term Note is subject to redemption
upon not less than 30 days' notice by first class mail, at any time, as a whole
or in part, at the election of the Issuer, without premium, together with
accrued interest to the date fixed for redemption in such notice, but any
interest, which is due and payable on or prior to such date, will be payable to
the Holder at the close of business on the relevant interest payment date. Each
partial redemption payment shall be made as provided in the Indenture on the
Outstanding Securities of this series of the Securities called for redemption.


                                       3
<PAGE>

              [Reverse Side of Subordinated One Month Term Note]

         In the event of redemption of this Term Note in part only, a new Term
Note or Term Notes for the unredeemed portion hereof will be issued in the name
of the Holder hereof upon the cancellation hereof.

         Recordations of Additions or Partial Redemptions. Upon presentation of
this Term Note at a Place of Payment, the Issuer, or the Issuer's agent, will,
for the Holder's convenience, record on the register that is a part hereof any
adjustments to the original principal amount of this Term Note, such as
additional purchases or partial redemptions.

         Assignment. As provided in the Indenture and subject to certain
limitations therein set forth, this Term Note shall not be transferable to any
person except by endorsement and delivery by the Holder, or his duly authorized
representative at any Place of Payment referred to above and, upon surrender to
the Issuer with proper endorsement, a new instrument of like tenor shall be
issued in the name of the transferee. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. Unless and until transferred in the manner aforesaid, the
Issuer, the Trustee and any agent of either of them, may treat the Holder whose
name or names appear on the face of this instrument as the absolute owner hereof
for all purposes and neither the Issuer, the Trustee nor any Paying Agent shall
be affected by notice to the contrary. If this Term Note is payable to two or
more persons, they shall be deemed to be joint tenants with right of
survivorship and any and all payments herein shall be made to either, or the
survivor of them.

         SUBORDINATION. THE INDEBTEDNESS EVIDENCED BY THIS TERM NOTE IS, TO THE
EXTENT AND IN THE MANNER PROVIDED IN THE INDENTURE, SUBORDINATE AND SUBJECT IN
RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS (AS
DEFINED IN THE INDENTURE) OF THE ISSUER, WHETHER OUTSTANDING AT THE DATE OF THE
INDENTURE OR THEREAFTER INCURRED. EACH HOLDER OF THIS TERM NOTE, BY HIS
ACCEPTANCE HEREOF, AGREES TO AND SHALL BE BOUND BY ALL THE PROVISIONS OF THE
INDENTURE RELATING TO SUCH SUBORDINATION.

         Event of Default. If an Event of Default, as defined in the Indenture,
shall occur and be continuing, the principal of all the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.

         When Payment Date is Not a Business Day. In any case where any interest
payment date, redemption date or the Stated Maturity Date (as set forth above)
of this Term Note shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Term Note) payment of principal and
interest need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the interest payment date or redemption date, or at the
Stated Maturity Date (as set forth above), provided that no interest shall
accrue for the period from and after such interest payment date, redemption date
or Stated Maturity Date, as the case may be.

         Issuable in Registered Form Only. This Term Note is one of a series of
Securities issuable only in registered form without coupons.

         Defined Terms. All capitalized terms in this Term Note which are
defined in the Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Indenture.

                                       4
<PAGE>

                      [Reverse Side of One Month Term Note]


                        Initial Purchase/Register Balance

         This Term Note Register is provided for the convenience of the Holder.
Entries may be made only by an authorized agent of the Issuer to reflect
additional purchases or redemptions. The Issuer will not be liable for any
transaction unless an entry is made hereon by an authorized agent of the Issuer.
The Holder will receive statements on a quarterly basis which will include all
transactions for the period.

<TABLE>
<CAPTION>

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                                Received/Paid
     Transaction Date                By                    Redemptions                        Purchases
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<S>                          <C>                    <C>                           <C>


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</TABLE>

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