An Alaska unsecured promissory note is a contract completed prior to the transfer of an unsecured loan to record repayment terms. The note is unbacked by collateral, meaning the borrower will not be required to provide property (such as a home or vehicle) to secure the loan. Because of this, lenders that agree to an unsecured note will have nothing to seize if the borrower defaults and, therefore, are at risk of losing the entire loan amount. Lenders can reduce the chance of loan default by checking the borrower’s credit score, income, employment history, and current outstanding debts.
Secured Promissory Note – Same as an unsecured note, only the borrower has to put up collateral.