Types (2)
Secured Promissory Note – A loan agreement requiring the borrower to pledge collateral as a condition to obtain the loan.
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Unsecured Promissory Note – Describes the terms of a loan transaction, but does not require the borrower to commit any property as collateral.
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Laws
- Interest & Usury Laws: Act 259 & Act 326
- Usury Rate with Contract (§ 438.31): 7%
- Usury Rate without Contract (§ 438.31): 5% (except for loans issued by a person, entity, or association whose rates are expressly authorized by the public service commission, department of commerce, or are regulated by another state or federal law).
- Criminal Usury Rate (§ 438.41): 25%
- Usury Rate for Pawnbrokers (§ 446.209(1)): 3% per month