An Idaho promissory note is a legal contract in which an individual promises to repay a personal loan to a money lender. A promissory note explains all of the details regarding the debt, including the loan amount, payment due date, interest rate, late fees, and whether the balance will be paid in a lump sum or installments.

To protect the money lender in the event the borrower defaults on the loan agreement, the lender may demand collateral in the form of “security.” With loan security, the lender would take ownership of the borrower’s property in lieu of payment (should the borrower be unable to pay). The lender could then accept the security as full payment or sell the property to recuperate their loss. However, if the property’s value doesn’t cover the loan amount, the borrower will continue to be liable for the remaining balance.

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Types (2)

Secured Promissory Note – A money lending agreement that affords protection to the lender in the form of collateral.

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Unsecured Promissory Note – This promissory note is not backed by collateral.

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