A South Dakota secured promissory note is a financial contract that allows an individual to lend money to another person with the added security of having assets or property pledged as collateral. If the borrower defaults on repayment of the loan, the collateral can be seized by the lender to cover their possible loss. The contract must identify both parties and specify the principal sum, interest rate, and payment schedule of the loan.

Due to the fact that this type of loan is less risky for the lender, the borrower will often pay a lesser interest rate than they would with an unsecured loan.