An Alaska promissory note is an agreement formed between a lender and a borrower that contractually obligates the borrower to reimburse the lender for the amount lent by a specific date. Often viewed as the cross-breed between an IOU and a loan agreement, promissory notes serve an essential role in forming a valid agreement while foregoing the complex legal terms and conditions found in official loan contracts. While the contract can be modified to meet unique circumstances, certain sections should not be removed, namely those pertaining to the loan amount, interest rate, and repayment plan.
Secured Promissory Note – Contains many of the same terms and conditions as the unsecured note, but differs in that the borrower is required to provide an asset to the lender at the start of the contract.
Unsecured Promissory Note – Does not require the borrower to provide the lender with an asset (such as a home or car) as collateral for the loan.