Updated on January 24th, 2022
A Hawaii unsecured promissory note spells out an individual’s legal obligation to repay a loan that isn’t protected with collateral. Since there is no security backing the note, the lender will not collect any property or valuable assets from the borrower if the required payments are not made. That being the case, lenders generally reserve unsecured promissory notes for low-risk borrowers or individuals whom they know personally, like a relative or close friend. Lenders should fully understand the dangers involved in an unsecured transaction, as their means of recovering funds are limited if the borrower defaults on payment.
Secured Promissory Note – A loan repayment agreement whereby collateral is provided by the borrower.
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