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Making a Secured Promissory Note
If you need a loan, or are considering giving one, a Secured Promissory Note can provide security for that loan. The note provides a lot of collateral as the borrower is promising to give up personal property or real estate if the loan isn't repaid. A Secured Promissory Note can help convince a lender to make a loan and ensures the borrower will pay it back by the due date.Use the Secured Promissory Note document if:
If you're lending money, you probably want something more than the borrower's good word that they'll pay you back—a Secured Promissory Note can help back up that promise. Lending money is a big deal, you want to make sure you'll get paid, and on time.
As a borrower, you may need to provide additional incentive for someone to lend to you. A Secured Promissory Note can help you do just that, but you'd better make sure you can repay the loan since you will have to give up your collateral if you do not.
Secured Promissory Note Form, Loan Security Agreement
The word "secured" means that the loan is backed by an asset put up as collateral. If the loan cannot be repaid the collateral is forfeited to the creditor. A common type of secured loan would be a mortgage—where the loan is secured by the property being purchased.
A promissory note can be helpful whenever you are lending or borrowing money and want to document the details of the transaction. You should consider getting the details in writing whenever you're entering into a significant agreement. After all, while it's an inconvenience if your friend doesn't pay back the $20 he owes you, it's an entirely different problem if you have disagreements over the original terms of a five-figure loan. Getting the details in writing can help save you headaches down the road.
Promissory notes can be as thorough as you want them to be, but there are a few necessities: