An Alaska secured promissory note is a contractual document formed between a lender and a borrower that outlines terms for the repayment of a loan backed by collateral. This note is “secured,” meaning the borrower will be required to select one or more of their assets to guarantee the loan. Note security provides the lender with a means of recuperating the balance of the loan should the borrower cease to pay it. The lender can do this by repossessing the property and 1) holding the asset as a “ransom” until the balance is paid off, or by 2) selling the asset and collecting the money once sold.
Unsecured Promissory Note – The lender cannot demand collateral through an unsecured note.