A North Dakota promissory note details the terms by which a borrower will repay a loan issued to them by a lending party. The note may be secured, meaning the borrower puts up collateral for the sum allocated, or it can be unsecured, meaning that no collateral is provided (but usually a higher interest rate is charged). The document should include the contact information of all parties involved, the amount issued, the interest rate to be paid, and provisions that detail the consequences for late payment or default.

A promissory note may benefit those who cannot secure a loan from a traditional lender, such as a bank. For example, a borrower can use this form to obtain a small loan from someone they know personally, allowing both parties to rest assured knowing that the terms of the money lending are delineated and leave no room for misinterpretation. This agreement may be potentially risky to the lender; therefore, a co-signer may be designated to assure the borrower’s obligations are met.

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Types (2)

Secured Promissory Note – A lending agreement where a borrower pledges collateral to a lender.

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Unsecured Promissory Note – This document states a borrower’s promise to repay a loan without pledging any collateral.

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