Updated on February 26th, 2022
An Ohio unsecured promissory note records a lending arrangement whereby the debtor (borrower) is not required to pledge collateral to acquire a loan. The completed note should stipulate the interest rate, the sum to be repaid, and how often payments are to be made.
Due to the increased financial risk of the lender, they may require a thorough credit check or that a co-signer be involved in giving assurances of repayment. Many lenders will prefer to loan money using a secured promissory note instead, as it enables them to collect and sell the borrower’s assets to recuperate their losses. However, the unsecured note may still be useful between friends and family members.
Secured Promissory Note – A repayment agreement where the debtor pledges collateral in order to secure a loan.
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