A Nevada secured promissory note is a debt instrument that transfers ownership of the borrower’s pledged property/assets to the lender if the loan is not repaid as relayed in the contract. The “security” can be anything of value, such as shares of stock, a vehicle, or real estate. However, it is recommended that the security’s market value be roughly equal to the loan amount. If the borrower defaults on the agreement, they must forfeit the security and pay any remaining difference between the value of the security and money lent plus interest (may be set at a more punitive rate if relayed in the agreement). In Nevada, any rate of interest may be charged if agreed to in writing (§ 99.050).
Unsecured Promissory Note – Contains the same elements as a secured promissory note but without collateral.