Updated on February 7th, 2022
An Idaho unsecured promissory note is a financial agreement wherein one party promises to repay an unsecured loan to another party. The only distinction between an unsecured and a secured promissory note is the presence of collateral, which is an asset or property the borrower uses as backing for the loan. With collateral, the lender is guaranteed some form of compensation if the loan doesn’t get paid. Since an unsecured note is devoid of such protection, the process of collecting unpaid money becomes more difficult.
When pursuing compensation of unsecured funds, the lender has several options for restitution: (1) propose a debt settlement agreement, (2) negotiate a loan restructure, (3) hire a debt collection agency, or (4) sue the borrower in court.
Secured Promissory Note – A debt agreement in which a borrower promises to repay a collateralized loan.
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