An Alabama unsecured promissory note is a contract written up between a person or company lending money, and a person borrowing it. A more relaxed type of loan agreement, the document allows for the recording of all essential loan terms while avoiding lengthy and complicated details many parties find unneeded. Because this note is unsecured, it should be reserved for use with borrowers that are low risk or those the lender knows personally (such as a family member or friend). It’s important the lender has trust in the borrower’s ability to repay, as the lender has no immediate way of recovering the money lent should the borrower default on the loaned balance.
Secured Promissory Note – With this note, the borrower must put up collateral.